EXHIBIT 1.1
2,200,000 Shares*
Common Stock
($.20 Par Value)
UNDERWRITING AGREEMENT
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May ___, 2000
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc.
CIBC World Markets Corp.
▇▇▇▇▇▇▇ & Company, Inc.
As Representatives of the Several Underwriters
c/o ▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
The undersigned, Microsemi Corporation, a Delaware corporation (the
"Company"), and the stockholders of the Company named in Schedule I hereto
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(collectively, the "Selling Securityholders"), hereby address you as the
representatives (the "Representatives") of each of the persons, firms and
corporations listed on Schedule II hereto (collectively, the "Underwriters") and
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hereby confirm their agreement with the several Underwriters as follows:
1. Description of Shares. The Company proposes to issue and sell to the
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Underwriters 2,000,000 shares of its Common Stock, par value $.20 per share (the
"Company Shares") and the Selling Securityholders propose to sell an aggregate
of 220,000 shares of Common Stock of the Company (the "Selling Securityholder
Shares") as set forth on Schedule II hereto (such 2,220,000 shares of Common
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Stock are herein collectively referred to as the "Firm Shares"). Solely for the
purpose of covering over-allotments in the sale of the Firm Shares, the Company
further proposes to grant to the Underwriters the right to purchase up to an
additional 333,000 shares of Common Stock (the "Option Shares"), as provided in
Section 3 of this Agreement. The Firm Shares and the Option Shares are herein
sometimes referred to as the "Shares" and are more fully described in the
Prospectus hereinafter defined.
2. Purchase, Sale and Delivery of Firm Shares. On the basis of the
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representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to issue and sell
2,000,000 of the Firm Shares to the Underwriters and each Selling Securityholder
agrees to sell to the several Underwriters the number of Firm Shares set forth
in Schedule II opposite the name of each Selling Securityholder, and each such
Underwriter agrees, severally and not jointly, to purchase from the Company and
the Selling Securityholders at a purchase price of $______ per share, the number
of Firm Shares set forth opposite the name of such Underwriter in Schedule II
hereto and any additional number of Option Shares which such Underwriter may
become obligated to purchase pursuant to Section 3 hereof.
The Company and the Custodian (as defined in Section 5(a)) will deliver
definitive certificates for the Firm Shares at the office of ▇.▇. ▇▇▇▇▇▇▇ &
Sons, Inc., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, New
__________________________
* excludes Option Shares
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York, New York ("▇▇▇▇▇▇▇' Office"), or such other place as you and the Company
may mutually agree upon, for the accounts of the Underwriters against payment to
the Company and the Selling Securityholders of the purchase price for the Firm
Shares sold to the several Underwriters by wire transfer of immediately
available funds payable to the order of the Company for the Firm Shares
purchased from the Company and to the Custodian, for the account of the Selling
Securityholders, for the Firm Shares purchased from the Selling Securityholders,
and the documents to be delivered on the Closing Date or any Option Closing Date
on behalf of the parties hereto pursuant to Section 7 of this Agreement shall be
delivered to the offices of O'Melveny & ▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other place as may be
agreed upon between you and the Company (the "Place of Closing"), at 10:00 a.m.,
New York time, on May __, 2000, or at such other time and date thereafter as you
and the Company may agree, such time and date of payment and delivery being
herein called the "Closing Date."
The certificates for the Firm Shares so to be delivered will be made
available to you for inspection at ▇▇▇▇▇▇▇' Office (or such other place as you
and the Company may mutually agree upon) at least one full business day prior to
the Closing Date and will be in such names and denominations as you may request
at least forty-eight hours prior to the Closing Date.
It is understood that an Underwriter, individually, may (but shall not be
obligated to) make payment on behalf of the other Underwriters whose funds shall
not have been received prior to the Closing Date for Shares to be purchased by
such Underwriter. Any such payment by an Underwriter shall not relieve the other
Underwriters of any of their obligations hereunder.
It is understood that the Underwriters propose to offer the Shares to the
public upon the terms and conditions set forth in the Registration Statement
hereinafter defined.
3. Purchase, Sale and Delivery of the Option Shares. The Company hereby
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grants options to the Underwriters to purchase from the Company on a pro rata
basis up to 333,000 Option Shares, on the same terms and conditions as the Firm
Shares; provided, however, that such options may be exercised only for the
purpose of covering any over-allotments which may be made by them in the sale of
the Firm Shares. No Option Shares shall be sold or delivered unless the Firm
Shares previously have been, or simultaneously are, sold and delivered.
The options are exercisable on behalf of the several Underwriters by you,
as Representatives, at any time, and from time to time, before the expiration of
30 days from the date of the Prospectus (or, if such 30th day shall be a
Saturday or Sunday or a holiday, on the next day thereafter when The Nasdaq
Stock Market is open for trading), for the purchase of all or part of the Option
Shares covered thereby, by notice given by you to the Company in the manner
provided in Section 13 hereof, setting forth the number of Option Shares as to
which the Underwriters are exercising the options, and the date of delivery of
said Option Shares, which date shall not be more than five business days after
such notice unless otherwise agreed to by the parties. You may terminate the
options at any time, as to any unexercised portion thereof, by giving written
notice to the Company to such effect.
You, as Representatives, shall make such allocation of the Option Shares
among the Underwriters as may be required to eliminate purchases of fractional
Shares.
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Delivery of the Option Shares with respect to which the options shall have
been exercised shall be made to or upon your order at ▇▇▇▇▇▇▇' Office (or at
such other place as you and the Company may mutually agree upon), against
payment by you of the per-share purchase price to the Company by wire transfer
of immediately available funds. Such payment and delivery shall be made at 10:00
a.m., New York time, on the date designated in the notice given by you as above
provided for (which may be the same as the Closing Date), unless some other date
and time are agreed upon, which date and time of payment and delivery are called
the "Option Closing Date." The certificates for the Option Shares so to be
delivered will be made available to you for inspection at ▇▇▇▇▇▇▇' Office at
least one full business day prior to the Option Closing Date and will be in such
names and denominations as you may request at least forty-eight hours prior to
the Option Closing Date. On the Option Closing Date, the Company shall provide
the Underwriters such representations, warranties, agreements, opinions,
letters, certificates and covenants with respect to the Option Shares as are
required to be delivered on the Closing Date with respect to the Firm Shares.
4. Representations, Warranties and Agreements of the Company. The Company
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represents and warrants to and agrees with each Underwriter that, and for the
benefit of the Underwriters only:
(a) A registration statement (Registration No.333-_____) on Form S-3
with respect to the Shares, including a preliminary prospectus, and such
amendments to such registration statement as may have been required to the date
of this Agreement, has been carefully prepared by the Company pursuant to and in
conformity with the requirements of the Securities Act of 1933, as amended (the
"1933 Act"), and the rules and regulations thereunder (the "1933 Act Rules and
Regulations") of the Securities and Exchange Commission (the "SEC"), and has
been filed with the SEC under the 1933 Act. Copies of such registration
statement, including any amendments thereto, each related preliminary prospectus
(meeting the requirements of Rule 430 or 430A of the 1933 Act Rules and
Regulations) contained therein, and the exhibits, financial statements and
schedules thereto have heretofore been delivered by the Company to you. If such
registration statement has not become effective under the 1933 Act, a further
amendment to such registration statement, including a form of final prospectus,
necessary to permit such registration statement to become effective will be
filed promptly by the Company with the SEC. If such registration statement has
become effective under the 1933 Act, a final prospectus containing information
permitted to be omitted at the time of effectiveness by Rule 430A of the 1933
Act Rules and Regulations will be filed promptly by the Company with the SEC in
accordance with Rule 424(b) of the 1933 Act Rules and Regulations. The term
"Registration Statement" as used herein means the registration statement as
amended at the time it becomes effective under the 1933 Act (the "Effective
Date"), including financial statements and all exhibits and, if applicable, the
information deemed to be included by Rule 430A of the 1933 Act Rules and
Regulations. If it is contemplated, at the time this Agreement is executed, that
a post-effective amendment to such registration statement will be filed and must
be declared effective before the offering of Shares may commence, the term
"Registration Statement" as used herein means the registration statement as
amended by said post-effective amendment. If an abbreviated registration
statement is prepared and filed with the SEC in accordance with Rule 462(b)
under the 1933 Act (an "Abbreviated Registration Statement"), the term
"Registration Statement" as used in this Agreement includes the Abbreviated
Registration Statement. The term "Prospectus" as used herein means (i) the
prospectus as first filed with the SEC pursuant to Rule
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424(b) of the 1933 Act Rules and Regulations, or (ii) if no such filing is
required, the form of final prospectus included in the Registration Statement at
the Effective Date or (iii) if a Term Sheet or Abbreviated Term Sheet (as such
terms are defined in Rule 434(b) and 434(c), respectively, of the 1933 Act Rules
and Regulations) is filed with the SEC pursuant to Rule 424(b)(7) of the 1933
Act Rules and Regulations, the Term Sheet or Abbreviated Term Sheet and the last
Preliminary Prospectus filed with the SEC prior to the time the Registration
Statement became effective, taken together. The term "Preliminary Prospectus" as
used herein shall mean a preliminary prospectus as contemplated by Rule 430 or
430A of the 1933 Act Rules and Regulations included at any time in the
Registration Statement. For purposes of this Agreement, the words "amend,"
"amendment," "amended," "supplement" or "supplemented" with respect to the
Registration Statement or the Prospectus shall mean amendments or supplements to
the Registration Statement or the Prospectus, as the case may be.
(b) The documents incorporated by reference in the Registration
Statement, the Prospectus or any amendment or supplement thereto, when they
became or become effective under the 1933 Act or were or are filed with the SEC
under the Securities Exchange Act of 1934, as amended (the "1934 Act"), as the
case may be, conformed or will conform in all material respects with the
requirements of the 1933 Act or the 1934 Act, as applicable, and the rules and
regulations of the SEC thereunder.
(c) Neither the SEC nor any state or other jurisdiction or other
regulatory body has issued, and neither is, to the knowledge of the Company,
threatening to issue, any stop order under the 1933 Act or other order
suspending the effectiveness of the Registration Statement (as amended or
supplemented) or preventing or suspending the use of any Preliminary Prospectus
or the Prospectus or suspending the qualification or registration of the Shares
for offering or sale in any jurisdiction nor instituted or, to the knowledge of
the Company, threatened to institute proceedings for any such purpose. Each
Preliminary Prospectus at its date of issue, the Registration Statement and the
Prospectus and any amendments or supplements thereto contain or will contain, as
the case may be, all statements which are required to be stated therein by, and
in all material respects conform or will conform, as the case may be, to the
requirements of, the 1933 Act and the 1933 Act Rules and Regulations. Neither
the Registration Statement nor any amendment thereto, as of the applicable
effective date, contains or will contain, as the case may be, any untrue
statement of a material fact or omits or will omit to state any material fact
required to be stated therein or necessary to make the statements therein, not
misleading, and neither any Preliminary Prospectus, the Prospectus nor any
supplement thereto contains or will contain, as the case may be, any untrue
statement of a material fact or omits or will omit to state any 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;
provided, however, that the Company makes no representation or warranty as to
information contained in or omitted from the Registration Statement or the
Prospectus, or any such amendment or supplement, in reliance upon, and in
conformity with, written information furnished to the Company relating to the
Underwriters by or on behalf of the Underwriters expressly for use in the
preparation thereof (as provided in Section 14 hereof). There is no contract or
document required to be described in the Registration Statement or Prospectus or
to be filed as an exhibit to the Registration Statement which is not described
in the Prospectus or filed as a part of the Registration Statement.
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(d) This Agreement has been duly authorized, executed and delivered by
the Company and constitutes a valid and legally binding obligation of the
Company enforceable against the Company in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally and by general principles of equity (the
"Exceptions").
(e) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with full
power and authority (corporate and other) to own, lease and operate its
properties and conduct its businesses as described in the Prospectus and to
execute and deliver, and perform its obligations under this Agreement. The
Company is duly qualified to do business as a foreign corporation in good
standing in California and in each state or other jurisdiction in which its
ownership or leasing of property or conduct of business legally requires such
qualification, except where the failure to be so qualified, individually or in
the aggregate, would not have a Material Adverse Effect. Each of the Company's
subsidiaries has been duly organized and is validly existing in good standing
under the laws of its respective state of organization, with full power and
authority to own, lease and operate its properties and conduct its business in
such state. Each subsidiary is duly qualified to do business as a foreign
corporation in good standing in each state or other jurisdiction in which its
ownership or leasing of property or conduct of business legally requires such
qualification, except where the failure to be so qualified, individually or in
the aggregate, would not have a Material Adverse Effect. The term "Material
Adverse Effect" as used herein means any material adverse effect on the
condition (financial or other), net worth, business, affairs, management,
prospects, results of operations or cash flow of the Company and its
subsidiaries, taken as a whole.
(f) Neither the Company nor any of its subsidiaries has sustained since
the date of the latest audited financial statements included in the Prospectus
any material loss or interference with its business from fire, explosion, flood
or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than as set
forth in the Prospectus. Since the respective dates as of which information is
given in the Prospectus, other than as set forth in or contemplated by the
Prospectus: (A) there has not been any material change in the capital stock,
short-term debt or long-term debt of the Company or any of its subsidiaries or
any material adverse change, or any development involving a prospective material
adverse change, in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the Company and its
subsidiaries taken as a whole, (B) the Company has not purchased any of its
outstanding capital stock, nor declared, paid or otherwise made any dividend or
distribution of any kind on its capital stock, and (C) none of the Company or
its subsidiaries have incurred any material liability or obligation, direct or
contingent, or entered into any material transaction not in the ordinary course
of business.
(g) The issuance and sale of the Shares and the execution, delivery and
performance by the Company of this Agreement, and the consummation of the
transactions herein contemplated, will not (A) conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, or result in the creation or imposition of any lien, charge or
encumbrance upon any properties or assets of the Company or any of its
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subsidiaries under, any indenture, mortgage, deed of trust, loan agreement,
partnership agreement, joint venture agreement or other agreement or instrument
to which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries is bound or to which any of the properties or
assets of the Company or any of its subsidiaries is subject, except to such
extent as, individually or in the aggregate, does not have a Material Adverse
Effect, (B) result in any violation of the provisions of the Company's
Certificate of Incorporation (the "Charter") or bylaws, or other governing
documents of the Company or its subsidiaries or (C) result in a violation of any
statute, rule, regulation or other law, or any order or judgment, of any court
or governmental agency or body having jurisdiction over the Company or any of
its subsidiaries or any of their properties. No consent, approval,
authorization, order, registration or qualification of or with any such court or
governmental agency or body is required for the execution, delivery and
performance of this Agreement, the issuance and sale of the Shares or the
consummation of the transactions contemplated hereby, except such as have been,
or will be prior to the Closing Date, obtained under the 1933 Act or as may be
required by the National Association of Securities Dealers, Inc. (the "NASD")
and such consents, approvals, authorizations, registrations or qualifications as
may be required under state securities or blue sky laws in connection with the
purchase and distribution of the Shares by the Underwriters.
(h)
(i) The Company has duly and validly authorized capital stock as set
forth in the Prospectus. All outstanding shares of Common Stock of the Company
and the Shares conform, or when issued will conform, to the description thereof
in the Prospectus and have been, or, when issued and paid for in the manner
described herein will be, duly authorized, validly issued, fully paid and
non-assessable. The issuance of the Shares to be purchased from the Company
hereunder will be consummated in compliance with all applicable laws (including,
without limitation, federal and state securities laws), is not subject to
preemptive or other similar rights, or any restriction upon the voting or
transfer thereof pursuant to applicable law (including the Delaware General
Corporation Law (the "DGCL")) or the Company's Charter, bylaws or governing
documents or any agreement to which the Company or any of its subsidiaries is a
party or by which any of them may be bound. All corporate action required to be
taken by the Company for the authorization, issuance and sale of the Shares has
been duly and validly taken. Prior to the Effective Date the Shares to be sold
by the Selling Securityholders and to be issued and sold by the Company will be
authorized for listing by the Nasdaq National Market upon official notice of
issuance.
(ii) Except as disclosed in the Prospectus, there are no outstanding
subscriptions, rights, warrants, options, calls, convertible securities,
commitments of sale or rights related to or entitling any person to purchase or
otherwise to acquire any shares of, or any security convertible into or
exchangeable or exercisable for, the capital stock of, or other ownership
interest in, the Company or any subsidiary.
(iii) All of the outstanding shares of capital stock of the Company's
subsidiaries have been duly authorized and validly issued, are fully paid and
non-assessable and are owned by the Company (except for nominee director
qualifying shares held by individuals with respect to foreign subsidiaries) free
and clear of any mortgage, pledge, lien, encumbrance, charge or adverse claim
(except for the Company's pledge of subsidiary shares under its credit
agreement with Canadian Imperial Bank) and are not the subject of any agreement
or understanding with any person and were not issued in violation of any
preemptive or similar rights. There are no outstanding
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subscriptions, rights, warrants, options, calls, convertible securities,
commitments of sale or instruments related to or entitling any person to
purchase or otherwise acquire any shares of, or any security convertible into or
exchangeable or exercisable for, the capital stock of, or other ownership
interest in, any of the Company's subsidiaries.
(i) Each of the Company and its subsidiaries is in possession of and is
operating in compliance with all franchises, grants, authorizations, licenses,
certificates, permits, easements, consents, orders and approvals ("Permits")
from all state, federal, foreign and other regulatory authorities, and has
satisfied the requirements imposed by regulatory bodies, administrative agencies
or other governmental bodies, agencies or officials, that are required for the
Company and its subsidiaries lawfully to own, lease and operate their properties
and conduct their businesses as described in the Prospectus, and, each of the
Company and its subsidiaries is conducting its business in compliance with all
of the laws, rules and regulations of each jurisdiction in which it conducts its
business, in each case with such exceptions, individually or in the aggregate,
as would not have a Material Adverse Effect. Each of the Company and its
subsidiaries has filed all notices, reports, documents or other information
("Notices") required to be filed under applicable laws, rules and regulations,
in each case, with such exceptions, individually or in the aggregate, as would
not have a Material Adverse Effect. Except as otherwise specifically described
in the Prospectus, neither the Company nor any of its subsidiaries has received
any notification from any court or governmental body, authority or agency,
relating to the revocation or modification of any such Permit or, to the effect
that any additional authorization, approval, order, consent, license,
certificate, permit, registration or qualification ("Approvals") from such
regulatory authority is needed to be obtained by any of them, in any case where
it could be reasonably expected that obtaining such Approvals or the failure to
obtain such Approvals, individually or in the aggregate, would have a Material
Adverse Effect.
(j) The Company and its subsidiaries have filed all necessary federal,
state, local and foreign income and franchise tax returns and have paid all
taxes required to be paid and any other assessment, fine or penalty levied
against them, to the extent that any of the foregoing is due and payable,
except, in all cases, for any such tax, assessment, fine or penalty that is
being contested in good faith (and except in any case in which the failure to so
file or pay would not have a Material Adverse Effect). All such tax returns are
complete and correct in all material respects. All tax liabilities are
adequately provided for on the books of the Company and its subsidiaries except
to such extent as would not have a Material Adverse Effect. The Company and its
subsidiaries have made all necessary payroll tax payments and deposits on a
timely basis. The Company and its subsidiaries have no knowledge of any tax
proceeding or action pending or threatened against the Company or its
subsidiaries which, individually or in the aggregate, might have a Material
Adverse Effect.
(k) Except as described in the Prospectus, the Company and its
subsidiaries own or possess, or can acquire on reasonable terms, adequate
patents, patent licenses, inventions, copyrights, know-how (including trade
secrets and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks and trade names
necessary to conduct the business now operated by them, and neither the Company
nor any of its subsidiaries has received any notice of infringement of or
conflict with asserted
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rights of others with respect to any of the foregoing which, individually or in
the aggregate, if the subject of an unfavorable decision, ruling or finding,
would have a Material Adverse Effect.
(l) The Company and each of its subsidiaries has good and marketable
title to all properties and assets (collectively, the "Properties"), as
described in the Prospectus, owned by them, free and clear of all liens,
charges, encumbrances or restrictions, except such as are described in the
Prospectus or are not material in relation to the business of the Company and
its subsidiaries taken as a whole, and the Company and each of its subsidiaries
have valid, subsisting and enforceable leases for the properties described in
the Prospectus as leased by them, with such exceptions as are not material and
do not interfere with the use made and proposed to be made of such properties by
the Company or any of its subsidiaries.
(m) Except as disclosed in the Prospectus: (i) each Property, including,
without limitation, the Environment (as defined below) associated with such
Property, is free of any Hazardous Substance (as defined below) in violation of
any Environmental Law (as defined below) applicable to such Property, except for
Hazardous Substances that would not result in a Material Adverse Effect; (ii)
none of the Company or any subsidiary or, to the knowledge of the Company and
its subsidiaries, any prior owner of any of the Properties has caused or
suffered to occur any Release (as defined below) of any Hazardous Substance into
the Environment on, in, under or from any Property other than such Releases
which, singly or in the aggregate, do not require significant remediation, and
no condition exists on, in, under or, to the knowledge of the Company and its
subsidiaries, adjacent to any Property that could result in the incurrence of
material liabilities or any material violations of any Environmental Law
applicable to such Property, give rise to the imposition of any material Lien
(as defined below) under any Environmental Law, or cause or constitute a
material health, safety or environmental hazard to any property, person or
entity; (iii) except as disclosed to the Representatives, none of the Company or
any subsidiary has received any written notice of a claim under or pursuant to
any Environmental Law applicable to a Property or under common law pertaining to
Hazardous Substances on or originating from any Property; (iv) except as
disclosed to the Representatives, none of the Company or any subsidiary has
received any notice from any Governmental Authority (as defined below) claiming
any violation of any Environmental Law applicable to a Property that is uncured
or unremediated as of the date hereof; (v) no Property is included or, to the
knowledge of the Company and its subsidiaries, proposed for inclusion on the
National Priorities List issued pursuant to CERCLA (as defined below) by the
United States Environmental Protection Agency (the "EPA") or on the
Comprehensive Environmental Response, Compensation, and Liability Information
System database maintained by the EPA, and has not otherwise been identified by
the EPA as a potential CERCLA removal, remedial or response site or included or,
to the knowledge of the Company and its subsidiaries, proposed for inclusion on,
any similar list of potentially contaminated sites pursuant to any other
applicable Environmental Law nor has the Company or any subsidiary received any
written notice from the EPA or any other Governmental Authority proposing the
inclusion of any Property on such list; and (vi) there are no underground
storage tanks located on or in any Property which have not been disclosed to the
Representatives.
As used herein: "Hazardous Substance" shall include, without limitation,
any hazardous substance, hazardous waste, toxic or dangerous substance,
pollutant, solid waste or similarly designated materials, including, without
limitation, oil, petroleum or any petroleum-derived substance or waste, asbestos
or asbestos-containing materials, PCBs, pesticides, explosives,
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radioactive materials, dioxins, urea formaldehyde insulation or any constituent
of any such substance, pollutant or waste, including any such substance,
pollutant or waste identified or regulated under any Environmental Law
(including, without limitation, materials listed in the United States Department
of Transportation Optional Hazardous Material Table, 49 C.F.R. Section 172.101,
as heretofore amended, or in the EPA's List of Hazardous Substances and
Reportable Quantities, 40 C.F.R. Part 302, as heretofore amended); "Environment"
shall mean any surface water, drinking water, ground water, land surface,
subsurface, strata, river sediment, buildings, structures, and ambient,
workplace and indoor air; "Environmental Law" shall mean the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended (42
U.S.C. Section 9601 et seq.) ("CERCLA"), the Resource Conservation and Recovery
Act of 1976, as amended (42 U.S.C. Section 6901, et seq.), the Clean Air Act, as
amended (42 U.S.C. Section 7401, et seq.), the Clean Water Act, as amended (33
U.S.C. Section 1251, et seq.), the Toxic Substances Control Act, as amended (15
U.S.C. Section 2601, et seq.), the Occupational Safety and Health Act of 1970,
as amended (29 U.S.C. Section 651, et seq.), the Hazardous Materials
Transportation Act, as amended (49 U.S.C. Section 1801, et seq.), and all other
applicable federal, state and local laws, ordinances, regulations, rules,
orders, decisions and permits relating to the protection of the environment or
of human health from environmental effects; "Governmental Authority" shall mean
any federal, state or local governmental office, agency or authority having the
duty or authority to promulgate, implement or enforce any Environmental Law;
"Lien" shall mean, with respect to any Property, any mortgage, deed of trust,
pledge, security interest, lien, encumbrance, penalty, fine, charge, assessment,
judgment or other liability in, on or affecting such Property; and "Release"
shall mean any spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, dumping, emanating or disposing of
any Hazardous Substance into the Environment, including, without limitation, the
abandonment or discarding of barrels, containers, tanks (including, without
limitation, underground storage tanks) or other receptacles containing or
previously containing any Hazardous Substance or any release, emission,
discharge or similar term, as those terms are defined or used in any
Environmental Law.
The Company and its subsidiaries (i) are in compliance with any and all
applicable federal, state and local laws and regulations relating to the
protection of occupational health and safety and all Environmental Laws, (ii)
have received all permits, licenses or other approvals required of them under
applicable federal and state occupational safety and health laws and regulations
and Environmental Laws to conduct their respective businesses and (iii) are in
compliance with all terms and conditions of any such permit, license or
approval, except in each case where such noncompliance, failure to receive
required permits, licenses or other approvals or failure to comply with the
terms and conditions of such permits, licenses or approvals would not, singly or
in the aggregate, have a Material Adverse Effect.
There are no costs or liabilities associated with any Environmental Law
(including, without limitation, any capital or operating expenditures required
for cleanup, closure of properties or compliance with any Environmental Law or
any permit, license or approval, any related constraints on operating activities
and any potential liabilities to third parties) which would, singly or in the
aggregate, have a Material Adverse Effect.
(n) No labor disturbance exists with the employees of the Company or any
of its subsidiaries or is imminent which, individually or in the aggregate,
would have a Material
-9-
Adverse Effect. None of the employees of the Company or any of its subsidiaries
is represented by a union and, to the best knowledge of the Company and its
subsidiaries, no union organizing activities are taking place. The Company is
not aware of any existing, threatened or imminent labor disturbance by the
employees of any of its principal suppliers, manufacturers or contractors that
could result in a Material Adverse Effect. Neither the Company nor any of its
subsidiaries has violated any federal, state or local law or foreign law
relating to discrimination in hiring, promotion or pay of employees, nor any
applicable wage or hour laws, or the rules and regulations thereunder, or
analogous foreign laws and regulations, which might, individually or in the
aggregate, result in a Material Adverse Effect.
(o) The Company and its subsidiaries are in compliance in all material
respects with all presently applicable provisions of the Employee Retirement
Income Security Act of 1974, as amended, including the regulations and published
interpretations thereunder ("ERISA"); no "reportable event" (as defined in
ERISA) has occurred with respect to any "pension plan" (as defined in ERISA) for
which the Company and its subsidiaries would have any liability; the Company and
its subsidiaries have not incurred and do not expect to incur liability under
(i) Title IV of ERISA with respect to termination of, or withdrawal from, any
"pension plan" or (ii) Sections 412 or 4971 of the Internal Revenue Code of
1986, as amended, including the regulations and published interpretations
thereunder (the "Code"); and each "pension plan" for which the Company or any of
its subsidiaries would have any liability that is intended to be qualified under
Section 401 (a) of the Code is so qualified in all material respects, and
nothing has occurred, whether by action or by failure to act, which would cause
the loss of such qualification. Each "pension plan" for which the Company, its
subsidiaries or any of their affiliates has any liability or with respect to
which the Company, its subsidiaries or any of their affiliates is a disqualified
person (as defined in the Code) or party-in-interest (as defined in ERISA) has
not been a party to any "prohibited transaction" (as defined in ERISA and the
Code), except for such noncompliance, reportable events, liabilities, or
failures to qualify that would not have a Material Adverse Effect.
(p) Except as disclosed in the Prospectus, the Company and each of its
subsidiaries are insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as are prudent and customary
in the businesses in which they are engaged, including, but not limited to,
directors' and officers' insurance, insurance covering real and personal
property owned or leased by the Company and its subsidiaries against theft,
damage, destruction, acts of vandalism and all other risks customarily insured
against, all of which insurance is in full force and effect. Neither the Company
nor any of its subsidiaries has been refused any insurance coverage sought or
applied for, and the Company has no reason to believe that it and its
subsidiaries will not be able to renew their existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business at a cost that would not have a
Material Adverse Effect.
(q) Neither the Company nor any of its subsidiaries is, or with the
giving of notice or lapse of time or both would be, in default or violation with
respect to its Charter, bylaws, or other governing documents. Neither the
Company nor any of its subsidiaries is, or with the giving of notice or lapse of
time or both would be, in default in the performance or observance of any
material obligation, agreement, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to
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which the Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries is bound or to which any of the properties or assets
of the Company or any of its subsidiaries is subject, or in violation of any
statutes, laws, ordinances or governmental rules or regulations or any orders or
decrees to which it is subject, which default or violation, individually or in
the aggregate, would have a Material Adverse Effect. Neither the Company nor any
of its subsidiaries has, at any time during the past two years, (A) made any
unlawful contributions to any candidate for any political office, or failed
fully to disclose any contribution in violation of law, or (B) made any payment
to any state, federal or foreign government official, or other person charged
with similar public or quasi-public duty (other than payment required or
permitted by applicable law).
(r) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its subsidiaries
is a party or of which any property of the Company or any of its subsidiaries is
the subject that, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a Material Adverse
Effect or which would materially and adversely affect the consummation of the
transactions contemplated hereby or which is required to be disclosed in the
Prospectus; to the best of the Company's knowledge, no such proceedings are
threatened or contemplated. Any statutes, regulations, contracts or other
documents that are required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement are
described or filed as required.
(s) The Company is not and, after giving effect to the offering and sale
of the Shares, will not be a "holding company," or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a "subsidiary
company," as such terms are defined in the Public Utility Holding Company Act of
1935, as amended (the "1935 Act").
(t) The Company is not and, after giving effect to the offering and sale
of the Shares, will not be an "investment company" or an entity "controlled" by
an "investment company," as such terms are defined in the Investment Company Act
of 1940, as amended (the "1940 Act").
(u) PricewaterhouseCoopers LLP, the accounting firm which has certified
the financial statements filed with and as a part of the Registration Statement,
is an independent public accounting firm within the meaning of the 1933 Act and
the 1933 Act Rules and Regulations. The Company and each of its subsidiaries
maintains a system of internal accounting controls sufficient to provide
reasonable assurance that: (1) transactions are executed in accordance with
management's general or specific authorizations; (2) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain accountability for
assets; (3) access to assets is permitted only in accordance with management's
general or specific authorization; and (4) the recorded accounts for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect thereto. The consolidated financial statements and
schedules of the Company, including the notes thereto, filed with and as a part
of the Registration Statement or Prospectus, are accurate in all material
respects and present fairly the financial condition of the Company and its
subsidiaries as of the respective dates thereof and the consolidated results of
operations and changes in financial position and consolidated statements of cash
flow for the
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respective periods covered thereby, all in conformity with generally accepted
accounting principles applied on a consistent basis throughout the periods
involved except as otherwise disclosed therein. All adjustments necessary for a
fair presentation of results for such periods have been made. The selected
financial data included in the Registration Statement and Prospectus present
fairly the information shown therein and have been compiled on a basis
consistent with that of the audited financial statements. Any operating or other
statistical data included in the Registration Statement and Prospectus comply in
all material respects with the 1933 Act and the 1933 Act Rules and Regulations
and present fairly the information shown therein.
(v) Except as described in the Prospectus, no holder of any security of
the Company has any right to require registration of shares of Common Stock or
any other security of the Company because of the filing of the Registration
Statement or the consummation of the transactions contemplated hereby and,
except as disclosed in the Prospectus, no person has the right to require
registration under the 1933 Act of any shares of Common Stock or other
securities of the Company. No person has the right, contractual or otherwise, to
cause the Company to permit such person to underwrite the sale of any of the
Shares or their shares of Common Stock. Except for this Agreement, there are no
contracts, agreements or understandings between the Company or any of its
subsidiaries and any person that would give rise to a valid claim against the
Company, its subsidiaries or any Underwriter for a brokerage commission,
finder's fee or like payment in connection with the issuance, purchase and sale
of the Shares.
(w) The Company has not distributed and, prior to the later to occur of
(i) the Closing Date or the Option Closing Date, if any, and (ii) completion of
the distribution of the Shares, will not distribute any offering material in
connection with the offering and sale of the Shares other than the Registration
Statement, the Preliminary Prospectus or the Prospectus.
(x) The Company has not taken and will not take, directly or indirectly,
any action designed to or which might reasonably be expected to cause or result
in stabilization or manipulation of the price of the Company's Common Stock, and
the Company is not aware of any such action taken or to be taken by affiliates
(as defined in the 1933 Act Rules and Regulations) of the Company.
(y) No relationship, direct or indirect, exists between or among the
Company or its subsidiaries on the one hand, and the directors, officers,
stockholders (in the case of the Company), customers or suppliers of the Company
or its subsidiaries on the other hand, which is required under the 1933 Act
Rules and Regulations to be described in the Prospectus which is not so
described.
5. Representations, Warranties and Agreements of the Selling
---------------------------------------------------------
Securityholders. Each of the Selling Securityholders hereby, severally
---------------
and not jointly, represents and warrants as follows:
(a) Such Selling Securityholder has good and marketable title to all the
Shares of Common Stock to be sold by such Selling Securityholder hereunder, free
and clear of all liens,
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encumbrances, equities, security interests and claims whatsoever, with full
right and authority to enter into this Agreement and to deliver the Shares
hereunder, subject, in the case of each Selling Securityholder, to the rights of
___________________, as Custodian (herein called the "Custodian"), and that upon
the delivery of and payment for the Selling Securityholder Shares hereunder, the
several Underwriters will receive good and marketable title thereto, free and
clear of all liens, encumbrances, equities, security interests and claims
whatsoever.
(b) Certificates in negotiable form for the Selling Securityholder
Shares have been placed in custody under a Custody Agreement and Irrevocable
Power of Attorney for delivery under this Agreement with the Custodian; such
Selling Securityholder specifically agrees that the shares of the Common Stock
represented by the certificates so held in custody for such Selling
Securityholder are subject to the interests of the several Underwriters and the
Company, that the arrangements made by such Selling Securityholder for such
custody, including the Power of Attorney provided for in such Custody Agreement,
are to that extent irrevocable, and that the obligations of such Selling
Securityholder shall not be terminated by any act of such Selling Securityholder
or by operation of law, whether by the death or incapacity of such Selling
Securityholder (or, in the case of a Selling Securityholder that is not an
individual, the dissolution or liquidation of such Selling Securityholder) or
the occurrence of any other event; if any such death, incapacity, dissolution,
liquidation or other such event should occur before the delivery of the Selling
Securityholder Shares hereunder, certificates for such shares of the Common
Stock shall be delivered by the Custodian in accordance with the terms and
conditions of this Agreement as if such death, incapacity, dissolution,
liquidation or other event had not occurred, regardless of whether the Custodian
shall have received notice of such death, incapacity, dissolution, liquidation
or other event.
(c) Such Selling Securityholder has not taken and will not take,
directly or indirectly, any action designed to or which might reasonably be
expected to cause or result in stabilization or manipulation of the price of the
Company's Common Stock.
(d) Such Selling Securityholder has executed and delivered to the
Representatives an agreement (in the form approved by the Representatives) of
such Selling Securityholder not to, among other things, sell or dispose of any
equity securities of the Company until 90 days after the Closing Date.
(e) To the extent that any statements or omissions made in the
Registration Statement, any Preliminary Prospectus or the Prospectus, or any
amendment or supplement thereto, are made in reliance upon, and in conformity
with, written information furnished to the Company by such Selling
Securityholder specifically for use in the preparation thereof, each part of the
Registration Statement, when such part became or becomes effective, did not or
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and each Preliminary Prospectus, on the date of filing
thereof with the SEC, and the Prospectus and any amendment or supplement
thereto, on the date of filing thereof with the SEC and on the Closing Date, did
not or will not include an untrue statement of a material fact or omit to state
a material fact necessary to make the statements therein not misleading.
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(f) To the best knowledge of such Selling Securityholder, the
representations and warranties of the Company set forth in Section 4 hereof are
true and correct.
6. Additional Covenants of the Company. The Company covenants and agrees
-----------------------------------
with the several Underwriters that:
(a) The Company will timely transmit copies of the Prospectus, and any
amendments or supplements thereto, or a Term Sheet or Abbreviated Term Sheet, as
applicable, to the SEC for filing pursuant to Rule 424(b) of the 1933 Act Rules
and Regulations.
(b) The Company will deliver to each of the Representatives, and to
counsel for the Underwriters (i) four (4) copies of the Registration Statement
as originally filed, including copies of exhibits thereto (other than any
exhibits incorporated by reference therein), and of any amendments and
supplements to the Registration Statement and (ii) a copy of each consent and
certificate included or incorporated by reference in, or filed as an exhibit to,
the Registration Statement as so amended or supplemented. The Company will
deliver to the Underwriters through the Representatives as soon as practicable
after the date of this Agreement as many copies of the Prospectus as the
Representatives may reasonably request for the purposes contemplated by the 1933
Act; if the Registration Statement is not effective under the 1933 Act, the
Company will use its best efforts to cause the Registration Statement to become
effective as promptly as possible, and it will notify you, promptly after it
shall receive notice thereof, of the time when the Registration Statement has
become effective. The Company will promptly advise the Representatives of any
request of the SEC for amendment of the Registration Statement or for supplement
to the Prospectus or for any additional information, and of the issuance by the
SEC or any state or other jurisdiction or other regulatory body of any stop
order under the 1933 Act or other order suspending the effectiveness of the
Registration Statement (as amended or supplemented) or preventing or suspending
the use of any Preliminary Prospectus or the Prospectus or suspending the
qualification or registration of the Shares for offering or sale in any
jurisdiction, and of the institution or threat of any proceedings therefor, of
which the Company shall have received notice or otherwise have knowledge prior
to the completion of the distribution of the Shares; and the Company will use
its best efforts to prevent the issuance of any such stop order or other order
and, if issued, to secure the prompt removal thereof.
(c) The Company will not file any amendment or supplement to the
Registration Statement, the Prospectus (or any other prospectus relating to the
Shares filed pursuant to Rule 424(b) of the 1933 Act Rules and Regulations that
differs from the Prospectus as filed pursuant to such Rule 424(b)), of which the
Underwriters shall not previously have been advised and furnished with a copy or
to which the Underwriters shall have reasonably objected or which is not in
compliance with the 1933 Act Rules and Regulations; and the Company will
promptly notify you after it shall have received notice thereof of the time when
any amendment to the Registration Statement becomes effective or when any
supplement to the Prospectus has been filed.
(d) During the period when a prospectus relating to any of the Shares
is required to be delivered under the 1933 Act by any Underwriter or dealer, the
Company will comply, at its own expense, with all requirements imposed by the
1933 Act and the 1933 Act Rules and Regulations, as now and hereafter amended,
and by the rules and regulations of the
-14-
SEC thereunder, as from time to time in force, so far as necessary to permit the
continuance of sales of or dealing in the Shares during such period in
accordance with the provisions hereof and as contemplated by the Prospectus.
(e) If, during the period when a prospectus relating to any of the
Shares is required to be delivered under the 1933 Act by any Underwriter or
dealer, (i) any event relating to or affecting the Company or of which the
Company shall be advised in writing by the Representatives shall occur as a
result of which, in the opinion of the Company or the Representatives, the
Prospectus as then amended or supplemented would include any untrue statement of
a material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading or (ii) it shall be necessary to amend or supplement the
Registration Statement or the Prospectus to comply with the 1933 Act, the 1933
Act Rules and Regulations, the 1934 Act or the rules and regulations of the SEC
thereunder, the Company will forthwith at its expense prepare and file with the
SEC, and furnish to the Representatives a reasonable number of copies of, such
amendment or supplement or other filing that will correct such statement or
omission or effect such compliance.
(f) During the period when a prospectus relating to any of the Shares
is required to be delivered under the 1933 Act by any Underwriter or dealer, the
Company will furnish such proper information as may be lawfully required and
otherwise cooperate in qualifying the Shares for offer and sale under the
securities or blue sky laws of such jurisdictions as the Representatives may
reasonably designate and will file and make in each year such statements or
reports as are or may be reasonably required by the laws of such jurisdictions;
provided, however, that the Company shall not be required to qualify as a
foreign corporation or shall be required to qualify as a dealer in securities or
to file a general consent to service of process under the laws of any
jurisdiction.
(g) In accordance with Section 11(a) of the 1933 Act and Rule 158 of
the 1933 Act Rules and Regulations, the Company will make generally available to
its security holders and to holders of the Shares, as soon as practicable, an
earnings statement (which need not be audited) in reasonable detail covering the
12 months beginning not later than the first day of the month next succeeding
the month in which occurred the effective date (within the meaning of Rule 158)
of the Registration Statement.
(h) During the period beginning from the date of this Agreement and
continuing to and including the date that is 90 days after the Closing Date, the
Company will not, without the prior written consent of the Representatives,
offer for sale, sell or enter into any agreement to sell, or otherwise dispose
of, any equity securities of the Company, except for (A) the Shares and (B)
shares issuable upon exercise of options currently outstanding under the
employee stock option plan.
(i) The Company will furnish to its security holders annual reports
containing financial statements audited by independent public accountants and
quarterly reports containing financial statements and financial information
which may be unaudited. The Company will, for a period of five years from the
Closing Date, deliver to the Underwriters at their principal executive offices a
reasonable number of copies of annual reports and copies of all other
-15-
documents, reports and information furnished by the Company to its documents,
reports and information furnished by the Company to its stockholders. The
Company will deliver to the Underwriters similar reports with respect to any
significant subsidiaries, as that term is defined in the 1933 Act Rules and
Regulations, which are not consolidated in the Company's financial statements.
Any report, document or other information required to be furnished under this
paragraph (h) shall be furnished as soon as practicable after such report,
document or information becomes available.
(j) The Company will apply the proceeds from the sale of the Shares
substantially as set forth in the description under "Use of Proceeds" in the
Prospectus, which description complies in all respects with the requirements of
Item 504 of Regulation S-K.
(k) The Company will promptly provide you with copies of all
correspondence to and from, and all documents issued to and by, the SEC in
connection with the registration of the Shares under the 1933 Act.
(l) Prior to the Closing Date (and, if applicable, the Option Closing
Date), the Company will furnish to you, as soon as they have been prepared,
copies of any unaudited interim consolidated financial statements of the Company
and its subsidiaries for any periods subsequent to the periods covered by the
financial statements appearing in the Registration Statement and the Prospectus.
(m) Prior to the Closing Date (and, if applicable, the Option Closing
Date), the Company shall not issue any press releases or other communications
directly or indirectly and will hold no press conferences with respect to the
Company or any of its subsidiaries, the financial condition, results of
operations, business, properties, assets or liabilities of the Company or any of
its subsidiaries, or the offering of the Shares, without your prior consent.
(n) The Company will use its best efforts to maintain the listing of
the Shares on the Nasdaq National Market.
(o) The Company will cause its directors and officers to furnish to
you, on or prior to the date of this Agreement, a letter or letters, in form and
substance satisfactory to counsel for the Underwriters, pursuant to which each
such person shall agree not to (except to the extent specifically authorized by
such person's respective lock-up agreement), and the Company and Selling
Securityholders will not, directly or indirectly, offer for sale, contract to
sell, sell, distribute, grant any option, right or warrant to purchase, pledge,
hypothecate or otherwise dispose of any shares of Common Stock, any securities
convertible into, or exercisable or exchangeable for, Common Stock or any other
rights to acquire such shares, for a period of 90 days from the Effective Date
without the prior written consent of ▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc.
(p) The Company and its subsidiaries will maintain and keep accurate
books and records reflecting their assets and maintain internal accounting
controls which provide reasonable assurance that (1) transactions are executed
in accordance with management's authorization, (2) transactions are recorded as
necessary to permit the preparation of the Company's consolidated financial
statements and to maintain accountability for the assets of the Company and its
subsidiaries, (3) access to the assets of the Company and its subsidiaries is
-16-
permitted only in accordance with management's authorization, and (4) the
recorded accounts of the assets of the Company and its subsidiaries are compared
with existing assets at reasonable intervals.
(q) If the Company elects to rely on Rule 462(b) under the 1933 Act,
the Company shall both file an Abbreviated Registration Statement with the SEC
in compliance with Rule 462(b) and pay the applicable fees in accordance with
Rule 111 of the 1933 Act by the earlier of (i) 9:00 p.m., New York time, on the
date of this Agreement, and (ii) the time that confirmations are given or sent,
as specified by Rule 462(b)(2).
7. Conditions of Underwriters' Obligations. The several obligations of the
---------------------------------------
Underwriters to purchase and pay for the Shares, as provided herein, shall be
subject to the accuracy, as of the date hereof and as of the Closing Date (and,
if applicable, the Option Closing Date), of the representations and warranties
of the Company and the Selling Securityholders contained herein, to the
performance by the Company and each Selling Securityholder of their respective
covenants and obligations hereunder, and to the following additional conditions:
(a) The Registration Statement and all post-effective amendments
thereto shall have become effective not later than 1:00 p.m., New York time, on
the date hereof, or, with your consent, at a later date and time, not later than
1:00 p.m., New York time, on the first business day following the date hereof,
or at such later date and time as may be approved by the Representatives; if the
Company has elected to rely on Rule 462(b) under the 1933 Act, the Abbreviated
Registration Statement shall have become effective not later than the earlier of
(x) 10:00 p.m. New York time, on the date hereof, or (y) at such later date and
time as may be approved by the Representatives. All filings required by Rule 424
and Rule 430A of the 1933 Act Rules and Regulations shall have been made. No
stop order suspending the effectiveness of the Registration Statement, as
amended from time to time, shall have been issued and no proceeding for that
purpose shall have been initiated or, to the knowledge of the Company or any
Underwriter, threatened or contemplated by the SEC, and any request of the SEC
for additional information (to be included in the Registration Statement or the
Prospectus or otherwise) shall have been complied with to the reasonable
satisfaction of the Underwriters.
(b) No Underwriter shall have advised the Company on or prior to the
Closing Date (and, if applicable, the Option Closing Date), that the
Registration Statement or Prospectus or any amendment or supplement thereto
contains an untrue statement of fact which, in the opinion of counsel to the
Underwriters, is material, or omits to state a fact which, in the opinion of
such counsel, is material and is required to be stated therein or is necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading.
(c) On the Closing Date (and, if applicable, the Option Closing
Date), you shall have received the opinion of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇,
counsel for the Company and the Selling Securityholders, addressed to you and
dated the Closing Date (and, if applicable, the Option Closing Date), to the
effect that:
(i) The Registration Statement and all post-effective amendments
thereto and the Abbreviated Registration Statement, if any, have become
effective under the 1933 Act; any required filing of the Prospectus or any
supplement thereto pursuant to Rule
-17-
424(b) or otherwise has been made in the manner and within the time period
required thereby; and, to the knowledge of such counsel after due inquiry, no
stop or other order suspending the effectiveness of the Registration Statement
has been issued and no proceedings for that purpose have been instituted or are
pending or contemplated under the 1933 Act or under the securities laws of any
jurisdiction.
(ii) The Registration Statement and the Prospectus, and each
amendment or supplement thereto, as of their respective effective or issue date,
comply as to form and appear on their face to be appropriately responsive in all
material respects to the requirements of Form S-3 under the 1933 Act and the
applicable 1933 Act Rules and Regulations (except that such counsel need express
no opinion as to the financial statements or other financial data).
(iii) The documents incorporated by reference in the Registration
Statement or the Prospectus or any amendment or supplement thereto, when they
became effective under the 1933 Act or when they were filed with the SEC under
the 1934 Act or as later amended, as the case may be, in either case to the
extent amended, appeared on their face to comply as to form and to be
appropriately responsive in all material respects with the requirements of the
1933 Act or the 1934 Act, as applicable, and the rules and regulations of the
SEC thereunder (except that such counsel need express no opinion as to the
financial statements or other financial data).
(iv) The Company is a corporation duly incorporated and validly
existing and in good standing under and by virtue of the laws of the State of
Delaware, and has the corporate power to own its property and to conduct its
business substantially as described in the Prospectus under the caption
"Business" and to enter into and perform its obligations under the Underwriting
Agreement. The Company is duly qualified to transact business and is in good
standing in California. There are no other jurisdictions in which the conduct of
its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a Material Adverse Effect.
(v) Each subsidiary of the Company has been duly organized, is
validly existing in good standing under the laws of its state of organization,
has the corporate power and authority to own its property and to conduct its
business. Each subsidiary is duly qualified to transact business and is in good
standing in all jurisdictions in which the conduct of their respective
businesses or their ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a Material Adverse Effect. Except for nominee
director qualifying shares held by individuals with respect to foreign
subsidiaries and to such counsel's knowledge after review of the relevant stock
records, the Company owns of record, directly or indirectly through other
subsidiaries, all of the outstanding shares of capital stock or other securities
evidencing equity ownership of such subsidiaries, and all such securities have
been duly authorized and validly issued, are fully paid and non-assessable and,
to the knowledge of such counsel, are not the subject of any agreement or
understanding with any person (except for a pledge of such shares pursuant to
the Company's credit agreement with Canadian Imperial Bank), and were not
issued in violation of any preemptive or similar rights; and, to the knowledge
of such counsel, except as disclosed in the Prospectus, there are no outstanding
subscriptions, rights, warrants, options, calls, convertible securities,
commitments of sale, or instruments related to or entitling any person to
purchase or otherwise acquire any shares of, or any security convertible into or
exercisable or exchangeable for, any such shares of capital stock or other
ownership interest of any of such subsidiaries.
-18-
(vi) The authorized stock of the Company conforms in all
material respects as to legal matters to the description thereof contained in
the Prospectus under the caption "Description of Capital Stock."
(vii) The shares of Common Stock outstanding prior to the
issuance of the Shares have been duly authorized and are validly issued, fully
paid and nonassessable, and are not subject to preemptive or other similar
rights arising by operation of the DGCL or under the Charter or bylaws of the
Company or any agreement or other instrument known to such counsel to which the
Company or any Selling Securityholder is a party or by which any of them is
bound.
(viii) The Shares have been duly authorized and, when issued and
delivered in accordance with the terms of this Agreement, against payment of the
agreed consideration, will be validly issued, fully paid and non-assessable, and
the issuance of such Shares will not be subject to any preemptive or similar
rights arising by operation of the DGCL or under the Charter or bylaws of the
Company or any agreement or other instrument known to such counsel.
(ix) This Agreement has been duly authorized, executed and
delivered by the Company.
(x) To the best of such counsel's knowledge, no consent,
approval, authorization, order of or qualification with any court or
governmental agency or authority of the State of California is required to be
obtained by the Company or any subsidiary in connection with the offering,
issuance or sale of the Shares under this Agreement except for such as have been
obtained or waived.
(xi) The information in the Prospectus under the caption
"Description of Capital Stock," to the extent that it constitutes matters of
law, summaries of legal matters, documents or proceedings, or legal conclusions,
has been reviewed by them and is substantially correct in all material respects.
(xii) The issuance and sale of the Shares and the execution,
delivery and performance by the Company of this Agreement, (A) will not conflict
with or result in a breach or violation of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any properties or assets of the Company or any of its
subsidiaries under, any indenture, mortgage, deed of trust, loan agreement or
other material agreement or instrument known to such counsel after due inquiry
to which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries is bound or to which any of the properties or
assets of the Company or any of its subsidiaries is subject, (B) will not result
in any violation of the provisions of the Charter, bylaws or other
organizational documents of the Company or any subsidiary, and (C) will not, to
such counsel's knowledge, result in any violation of any statute, rule,
regulation or other law under the Delaware General Corporation Law or any
current California or federal law, or any order or judgment known to such
counsel after due inquiry, of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
properties.
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(xiii) No consent, approval, authorization, order, registration
or qualification of or with any court or any California or federal governmental
agency or body is required in connection with the execution, delivery and
performance of this Agreement, and the issuance and sale of the Shares, except
such as may be required under the 1933 Act or the 1933 Act Rules and Regulations
and have been obtained, or as may be required by the NASD or under state
securities or blue sky laws in connection with the purchase and distribution of
the Shares by the Underwriters. Each of the Company and its subsidiaries has
filed all Notices pursuant to, and has obtained all Approvals required to be
obtained under, and has otherwise complied with all requirements of, all
applicable laws and regulations in connection with the issuance and sale of the
Shares, in each case with such exceptions, individually or in the aggregate, as
would not affect the validity of the Shares, their issuance or the transactions
contemplated hereby or have a Material Adverse Effect; and no such Notices or
Approvals are required to be filed or obtained by the Company or any of its
subsidiaries in connection with the execution, delivery and performance of this
Agreement, the issuance and sale of the Shares or the transactions contemplated
hereby, in each case with such exceptions, individually or in the aggregate, as
would not affect the validity of the Shares, their issuance or the transactions
contemplated hereby or have a Material Adverse Effect.
(xiv) The statements in the Prospectus and in the Registration
Statement, in each case insofar as such statements constitute summaries of the
legal matters, documents or proceedings referred to therein, fairly present the
information called for with respect to such legal matters, documents and
proceedings and fairly summarize the matters referred to therein.
(xv) To the knowledge of such counsel and other than as set
forth in the Prospectus, there are no legal or governmental proceedings pending
to which the Company or any of its subsidiaries is a party or of which any
property of the Company or any of its subsidiaries is the subject that, if
determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a Material Adverse Effect on the current
or future consolidated financial position, stockholders' equity or results of
operations of the Company and its subsidiaries taken as a whole; and, to the
knowledge of such counsel after due inquiry, no such proceedings are threatened
in writing by governmental authorities or by others.
(xvi) To the knowledge of such counsel, the Company and each of
its subsidiaries hold all licenses, certificates, permits and approvals from all
state, federal and other regulatory authorities, and have satisfied in all
material respects the requirements imposed by regulatory bodies, administrative
agencies or other governmental bodies, agencies or officials, that are required
for the Company and its subsidiaries lawfully to own, lease and operate its
properties and conduct its business as described in the Prospectus, except to
the extent such failure would not have a Material Adverse Effect.
(xvii) To the knowledge of such counsel, there are no contracts
or documents of a character required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the Registration
Statement which are not described or filed as required.
(xviii) To such counsel's knowledge after due inquiry, the Company
is not and, after giving effect to the offering and sale of the Shares, will not
be a "holding company," or a "subsidiary company" o f a "holding
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company," or an "affiliate" of a "holding company" or of a "subsidiary company,"
as such terms are defined in the 1935 Act.
(xix) To such counsel's knowledge after due inquiry, the Company
is not and, after giving effect to the offering and sale of the Shares, will not
be an "investment company" or an entity "controlled" by an "investment company,"
as such terms are defined in the ▇▇▇▇ ▇▇▇.
(xx) To the knowledge of such counsel and except as disclosed
in the Prospectus, no holder of any security of the Company has any right to
require registration of shares of Common Stock or any other security of the
Company because of the filing of the Registration Statement or the consummation
of the transactions contemplated hereby and, except as disclosed in the
Prospectus, no person has the right to require registration under the 1933 Act
of any shares of Common Stock or other securities of the Company.
Such counsel shall confirm that during the preparation of the Registration
Statement and Prospectus, including in each case the documents incorporated by
reference therein, such counsel participated in conferences with the
Representatives and their counsel and with officers and representatives of the
Company and its independent accountants, at which conferences the contents of
the Registration Statement and the Prospectus were discussed, reviewed and
revised. On the basis of the information which was developed in the course
thereof, considered in light of such counsel's understanding of applicable law
and the experience gained by such counsel through their practice thereunder,
without such counsel assuming responsibility for the accuracy and completeness
of such statements except to the extent expressly provided above, such counsel
shall confirm that nothing came to their attention that would lead them to
believe that either the Registration Statement, as of the Effective Date, or the
Prospectus or any amendment or supplement thereto as of its respective issue
date and as of the Closing Date, or, if applicable, the Option Closing Date,
contained or contains any untrue statement of a material fact or omitted or
omits 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 (other than the financial statements or other
financial data as to which such counsel need express no opinion).
In rendering the foregoing opinion, such counsel (1) may rely as to matters
involving laws of any jurisdictions other than the State of California, Delaware
General Corporation Law or the United States on an assumption that all other
laws are the same as the laws mentioned above, (2) may rely upon opinions
addressed to the Underwriters of other counsel satisfactory to them and
O'Melveny & ▇▇▇▇▇ LLP, (3) may rely as to all matters of fact, upon certificates
and written statements of the executive officers of, and accountants for, the
Company and (4) may state that their belief is based upon the procedures set
forth in the opinion letter.
(d) You shall have received the opinion of the counsel for each of
the Selling Securityholders, dated the Closing Date, to the effect that:
(i) This Agreement has been duly authorized, executed and
delivered by such Selling Securityholder, the Custodian has been duly and
validly authorized to carry out all transactions contemplated herein and therein
on behalf of such Selling Securityholder, and the performance of this Agreement
by such Selling Securityholder and the consummation by such Selling
Securityholder of the transactions herein and therein contemplated and will not
result in a
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breach or violation of such terms and provisions of, or constitute a default
under, any statute, any agreement or instrument known to such counsel to which
such Selling Securityholder is a party or by which it is bound or to which any
of the property of such Selling Securityholder is subject, the charter or bylaws
of such Selling Securityholder, or any order, rule or regulation known to such
counsel of any court or governmental agency or body having jurisdiction over
such Selling Securityholder or any of its properties; and no consent, approval,
authorization or order of, or filing with, any court or governmental agency or
body is required for the consummation of the transactions contemplated by this
Agreement in connection with the sale of the Shares to be sold by such Selling
Securityholder hereunder, except such as have been obtained under the 1933 Act
and such as may be required under state securities laws in connection with the
purchase and distribution of such Shares by the Underwriters; and
(ii) Upon payment for and delivery of the Selling
Securityholder Shares, and assuming the several Underwriters are acquiring the
Selling Securityholder Shares in good faith without notice or any adverse claim,
the several Underwriters will be the owners of the Selling Securityholder
Shares, free and clear of any adverse claim.
In rendering the opinion in (ii) above, such counsel may rely upon a
certificate of the Selling Securityholders as to matters of fact respecting
ownership of and any security interests, other encumbrances or adverse claims on
the Shares sold by such Selling Securityholder, provided that such counsel shall
state that they believe that both you and they are justified in relying upon
such certificates.
(e) You shall have received on the Closing Date (and, if applicable,
the Option Closing Date), from O'Melveny & ▇▇▇▇▇ LLP, counsel to the
Underwriters, such opinion or opinions, dated the Closing Date (and, if
applicable, the Option Closing Date) with respect to such matters as you may
reasonably require; and the Company shall have furnished to such counsel such
documents as they reasonably request for the purposes of enabling them to review
or pass on the matters referred to in this Section 7 and in order to evidence
the accuracy, completeness and satisfaction of the representations, warranties
and conditions herein contained.
(f) You shall have received at or prior to the Closing Date from
O'Melveny & ▇▇▇▇▇ LLP a memorandum or memoranda, in form and substance
satisfactory to you, with respect to the qualification for offering and sale by
the Underwriters of the Shares under state securities or Blue Sky laws of such
jurisdictions as the Underwriters may have designated to the Company.
(g) On the business day immediately preceding the date of this
Agreement and on the Closing Date (and, if applicable, the Option Closing Date),
you shall have received from PricewaterhouseCoopers LLP, a letter or letters,
dated the date of this Agreement and the Closing Date (and, if applicable, the
Option Closing Date), respectively, in form and substance satisfactory to you,
confirming that they are independent public accountants with respect to the
Company within the meaning of the 1933 Act and the published Rules and
Regulations, and stating to the effect set forth in Schedule III hereto.
(h) Except as contemplated in the Prospectus, (i) neither the Company
nor any of its subsidiaries shall have sustained since the date of the latest
audited financial statements
-22-
included in the Prospectus any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree; and (ii)
subsequent to the respective dates as of which information is given in the
Registration Statement and the Prospectus, neither the Company nor any of its
subsidiaries shall have incurred any liability or obligation, direct or
contingent, or entered into any transactions, and there shall not have been any
change in the capital stock or short-term or long-term debt of the Company and
its subsidiaries or any change, or any development involving or which might
reasonably be expected to involve a prospective change in the condition
(financial or other), net worth, business, affairs, management, prospects,
results of operations or cash flow of the Company or its subsidiaries, the
effect of which, in any such case described in clause (i) or (ii), is in your
judgment so material or adverse as to make it impracticable or inadvisable to
proceed with the public offering or the delivery of the Shares being delivered
on such Closing Date (and, if applicable, the Option Closing Date) on the terms
and in the manner contemplated in the Prospectus.
(i) There shall not have occurred any of the following: (i) a
suspension or material limitation in trading in securities generally on the New
York Stock Exchange or the American Stock Exchange or The Nasdaq National Market
or the establishing on such exchanges or market by the SEC or by such exchanges
or markets of minimum or maximum prices which are not in force and effect on the
date hereof; (ii) a suspension or material limitation in trading in the
Company's securities on The Nasdaq National Market or the establishing on such
exchange by the SEC or by such exchange of minimum or maximum prices which are
not in force and effect on the date hereof; (iii) a general moratorium on
commercial banking activities declared by either federal or any state
authorities; (iv) the outbreak or escalation of hostilities involving the United
States or the declaration by the United States of a national emergency or war,
which in your judgment makes it impracticable or inadvisable to proceed with the
public offering or the delivery of the Shares in the manner contemplated in the
Prospectus; or (v) any calamity or crisis, change in national, international or
world affairs, act of God, change in the international or domestic markets, or
change in the existing financial, political or economic conditions in the United
States or elsewhere, which in your judgment makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the Shares in
the manner contemplated in the Prospectus.
(j) You shall have received certificates, dated the Closing Date
(and, if applicable, the Option Closing Date) and signed by the President and
the Chief Financial Officer of the Company, in their capacities as such, stating
that:
(i) the condition set forth in Section 7(a) has been fully
satisfied;
(ii) they have carefully examined the Registration Statement and
the Prospectus as amended or supplemented and nothing has come to their
attention that would lead them to believe that either the Registration Statement
or the Prospectus, or any amendment or supplement thereto as of their respective
effective, issue or filing dates, contained, and the Prospectus as amended or
supplemented, at such Closing Date, contains any untrue statement of a material
fact, or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading;
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(iii) since the Effective Date, there has occurred no event
required to be set forth in an amendment or supplement to the Registration
Statement or the Prospectus which has not been so set forth;
(iv) all representations and warranties made herein by the
Company are true and correct at such Closing Date, with the same effect as if
made on and as of such Closing Date, and all agreements herein to be performed
or complied with by the Company on or prior to such Closing Date have been duly
performed and complied with by the Company;
(v) neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial statements included in
the Prospectus any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree;
(vi) except as disclosed in the Prospectus, subsequent to the
respective dates as of which information is given in the Registration Statement
and the Prospectus, neither the Company nor any of its subsidiaries has incurred
any liabilities or obligations, direct or contingent, other than in the ordinary
course of business, or entered into any transactions not in the ordinary course
of business, which in either case are material to the Company or such
subsidiary; and there has not been any change in the capital stock or material
increase in the short-term debt or long-term debt of the Company or any of its
subsidiaries or any material adverse change or any development involving or
which may reasonably be expected to involve a prospective material adverse
change, in the condition (financial or other), net worth, business, affairs,
management, prospects, results of operations or cash flow of the Company and its
subsidiaries taken as a whole; and there has been no dividend or distribution of
any kind, paid or made by the Company on any class of its capital stock;
(vii) there has not been any change or decrease specified in
paragraph ______ of the letter or letters delivered to the Underwriters referred
to in Section 7(g) above, except those changes and decreases that are disclosed
therein; and
(viii) covering such other matters as you may reasonably request.
(k) You shall have received from each Selling Securityholder a
certificate, dated the Closing Date, to the effect that:
(i) The representations and warranties of such Selling
Securityholder in this Agreement are true and correct, as if made at and as of
the Closing Date, and such Selling Securityholder has complied with all the
agreements and satisfied all the conditions to be performed or satisfied by such
Selling Securityholder at or prior to the Closing Date; and
(ii) Such Selling Securityholder, after a careful examination
of the Registration Statement, does not know of an untrue statement of a
material fact included in the Registration Statement or the omission from the
Registration Statement of any material fact required to be stated therein or
necessary to make the statements therein not misleading.
-24-
(l) Each Selling Securityholder shall have delivered to you on or
prior to the Closing Date a properly completed and executed United States
Treasury Department Form W-9 (or other applicable form or statement specified by
Treasury Department regulations).
(m) Neither the Company nor any Selling Securityholder shall have
failed, refused, or been unable, at or prior to the Closing Date (and, if
applicable, the Option Closing Date) to have performed any agreement on its part
to be performed or any of the conditions herein contained and required to be
performed or satisfied by it at or prior to such Closing Date.
(n) The Company and each Selling Securityholder shall have furnished
to you at the Closing Date (and, if applicable, the Option Closing Date) such
further information, opinions, certificates, letters and documents as you may
have reasonably requested.
(o) The Shares shall have been approved for trading on The Nasdaq
National Market upon official notice of issuance.
(p) You shall have received duly and validly executed letter
agreements referred to in Section 6(n) hereof.
All such opinions, certificates, letters and documents will be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to you and to O'Melveny & ▇▇▇▇▇ LLP, counsel for the several
Underwriters. The Company will furnish you with such signed and conformed copies
of such opinions, certificates, letters and documents as you may request.
If any of the conditions specified above in this Section 7 shall not have
been satisfied at or prior to the Closing Date (and, if applicable, the Option
Closing Date) or waived by you in writing, this Agreement may be terminated by
you on notice to the Company and the Selling Securityholders.
8. Indemnification and Contribution.
--------------------------------
(a) The Company and the Selling Securityholders jointly and severally
agree to indemnify and hold harmless each Underwriter for and against any
losses, damages or liabilities, joint or several, to which such Underwriter may
become subject, under the 1933 Act or otherwise, insofar as such losses, damages
or liabilities (or actions or claims in respect thereof) arise out of or are
based upon (i) an untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, the Registration Statement, the
Prospectus or any other prospectus relating to the Shares, or any amendment or
supplement thereto, or in any blue sky application or other document executed by
the Company or based on any information furnished in writing by the Company,
filed in any state or other jurisdiction in order to qualify any or all of the
Shares under the securities laws thereof (the "Blue Sky Application"), or (ii)
the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
will reimburse each Underwriter for any legal or other expenses incurred by such
Underwriter in connection with investigating, preparing, pursuing or defending
against or appearing as a third party witness in connection with any such loss,
damage, liability or action or claim, including, without limitation, any
investigation or proceeding by any governmental agency or body, commenced or
-25-
threatened, including the reasonable fees and expenses of counsel to the
indemnified party, as such expenses are incurred (including such losses,
damages, liabilities or expenses to the extent of the aggregate amount paid in
settlement of any such action or claim, provided that (subject to Section 8(d)
hereof) any such settlement is effected with the written consent of the
Company); provided, however, that neither the Company nor any Selling
-------- -------
Securityholder shall be liable in any such case to the extent, but only to the
extent, that any such loss, damage or liability arises out of or is based upon
an untrue statement or alleged untrue statement or omission or alleged omission
made in any Preliminary Prospectus, the Registration Statement, the Prospectus
or any other prospectus relating to the Shares, or any such amendment or
supplement, in reliance upon and in conformity with written information relating
to the Underwriter furnished to the Company by you or by any Underwriter through
you, expressly for use in the preparation thereof (as provided in Section 14
hereof); provided, further, that any Selling Securityholder (other than ▇▇▇▇▇▇
▇▇▇▇, ▇▇.) shall only be responsible for any losses, damages or liabilities
pursuant to this Section 8(a) to the extent that such loss, damage or liability
arises out of or is based upon an untrue statement or omission or alleged
omission made in any Preliminary Prospectus, the Registration Statement, the
Prospectus or any other prospectus relating to the Shares, or any such
supplement or amendment, with respect to information relating to the Selling
Securityholder or arising out of a breach by such Selling Securityholder of any
of the representations, warranties or agreements of such Selling Securityholder
set forth in Section 5 of this Agreement.
(b) Each Underwriter, severally and not jointly, will indemnify and
hold harmless the Company and the Selling Securityholders for and against any
losses, damages or liabilities to which the Company or the Selling
Securityholders may become subject, under the 1933 Act or otherwise, insofar as
such losses, damages or liabilities (or actions or claims in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in any Preliminary Prospectus, the Registration
Statement, the Prospectus or any other prospectus relating to the Shares, or any
amendment or supplement thereto, or any Blue Sky Application, or arise out of
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in any Preliminary Prospectus, the Registration Statement, the Prospectus or any
other prospectus relating to the Shares, or any such amendment or supplement, or
any Blue Sky Application, in reliance upon and in conformity with written
information relating to the Underwriters furnished to the Company by you or by
any Underwriter through you, expressly for use in the preparation thereof (as
provided in Section 14 hereof), and will reimburse the Company and the Selling
Securityholders for any legal or other expenses incurred by the Company or the
Selling Securityholders in connection with investigating or defending any such
action or claim as such expenses are incurred (including such losses, damages,
liabilities or expenses to the extent of the aggregate amount paid in settlement
of any such action or claim, provided that (subject to Section 8(d) hereof) any
such settlement is effected with the written consent of the Underwriters).
(c) Promptly after receipt by an indemnified party under Section 8(a)
or 8(b) hereof of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against an indemnifying
party under Section 8(a) or 8(b) hereof, notify each such indemnifying party in
writing of the commencement thereof, but the failure so to notify such
indemnifying party shall not relieve such indemnifying party from any liability
except to the extent that it has been prejudiced in any material respect by such
failure or from any liability that it may have to any such indemnified party
otherwise than under Section 8(a) or 8(b) hereof. In case any such action shall
be brought against any such indemnified party and it shall notify each
indemnifying party of the commencement thereof, each such indemnifying party
shall be entitled to participate therein and, to the extent that it shall wish,
jointly with any other indemnifying party under Section 8(a) or 8(b) hereof
similarly notified, to assume the
-26-
defense thereof, with counsel satisfactory to such indemnified party (who shall
not, except with the consent of such indemnified party, be counsel to such
indemnifying party), and, after notice from such indemnifying party to such
indemnified party of its election so to assume the defense thereof, such
indemnifying party shall not be liable to such indemnified party under Section
8(a) or 8(b) hereof for any legal expenses of other counsel or any other
expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs of
investigation. The indemnified party shall have the right to employ its own
counsel in any such action, but the fees and expenses of such counsel shall be
at the expense of such indemnified party unless (i) the employment of counsel by
such indemnified party at the expense of the indemnifying party has been
authorized by the indemnifying party, (ii) the indemnified party shall have been
advised by such counsel that there may be a conflict of interest between the
indemnifying party and the indemnified party in the conduct of the defense, or
certain aspects of the defense, of such action (in which case the indemnifying
party shall not have the right to direct the defense of such action with respect
to those matters or aspects of the defense on which a conflict exists or may
exist on behalf of the indemnified party) or (iii) the indemnifying party shall
not in fact have employed counsel reasonably satisfactory to such indemnified
party to assume the defense of such action, in any of which events such fees and
expenses to the extent applicable shall be borne, and shall be paid as incurred,
by the indemnifying party. If at any time such indemnified party shall have
requested such indemnifying party under Section 8(a) or 8(b) hereof to reimburse
such indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 8(a) or 8(b) hereof effected without its written consent if (i) such
settlement is entered into more than 45 days after receipt by such indemnifying
party of such request for reimbursement, (ii) such indemnifying party shall have
received notice of the terms of such settlement at least 30 days prior to such
settlement being entered into and (iii) such indemnifying party shall not have
reimbursed such indemnified party in accordance with such request for
reimbursement prior to the date of such settlement. No such indemnifying party
shall, without the written consent of such indemnified party, effect the
settlement or compromise of, or consent to the entry of any judgment with
respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not such
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (A) includes an unconditional
release of such indemnified party from all liability arising out of such action
or claim and (B) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any such indemnified party.
In no event shall such indemnifying parties be liable for the fees and expenses
of more than one counsel, excluding any local counsel, for all such indemnified
parties in connection with any one action or separate but similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to indemnify or hold harmless an indemnified
party under Section 8(a) or 8(b) hereof in respect of any losses, damages or
liabilities (or actions or claims in respect thereof) referred to therein, then
each indemnifying party under Section 8(a) or 8(b) hereof shall contribute to
the amount paid or payable by such indemnified party as a result of such losses,
damages or liabilities (or actions or claims in respect thereof) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Selling Securityholders, on the one hand, and the Underwriters,
on the other hand, from the offering of the Shares. If, however, the
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allocation provided by the immediately preceding sentence is not permitted by
applicable law or if the indemnified party failed to give the notice required
under Section 8(c) hereof and such indemnifying party was prejudiced in a
material respect by such failure, then each such indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company and the Selling Securityholders, on the one
hand, and the Underwriters, on the other hand, in connection with the statements
or omissions that resulted in such losses, damages or liabilities (or actions or
claims in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Selling
Securityholders, on the one hand, and the Underwriters, on the other hand, shall
be deemed to be in the same proportion as the total net proceeds from such
offering (before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriters. The
relative fault of the Company and the Selling Securityholders, on the one hand,
and the Underwriters, on the other hand, shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company and the Selling Securityholders, on the one
hand, or the Underwriters, on the other hand, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Underwriters agree that it would not
be just and equitable if contribution pursuant to this Section 8(d) were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to above in this Section 8(d).
The amount paid or payable by such an indemnified party as a result of the
losses, damages or liabilities (or actions or claims in respect thereof)
referred to above in this Section 8(d) shall be deemed to include any legal or
other expenses incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8(d), no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11 (f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation. The
obligations of the Underwriters in this Section 8(d) to contribute are several
in proportion to their respective underwriting obligations with respect to the
Shares and not joint.
(e) The obligations of the Company and the Selling Securityholders
under this Section 8 shall be in addition to any liability that the Company and
the Selling Securityholders may otherwise have and shall extend, upon the same
terms and conditions, to each officer, director, employee, agent or other
representative of the Company and to each person, if any, who controls any
Underwriter within the meaning of the 1933 Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability that the
respective Underwriters may otherwise have and shall extend, upon the same terms
and conditions, to each officer and director of the Company who signed the
Registration Statement and to each person, if any, who controls the Company
within the meaning of the 1933 Act.
-28-
(f) Any liability of the Selling Securityholders arising under this
Agreement, including the indemnity and reimbursement agreements contained in the
provisions of this Section 8 shall be limited to an amount equal to the net
proceeds received by the Selling Securityholders in connection with the Shares
sold by the Selling Securityholders to the Underwriters.
(g) The parties to this Agreement hereby acknowledge that they are
sophisticated business persons who were represented by counsel during the
negotiations regarding the provisions hereof, including, without limitation, the
provisions of this Section 8, and are fully informed regarding such provisions.
They further acknowledge that the provisions of this Section 8 fairly allocate
the risks in light of the ability of the parties to investigate the Company and
its business in order to assure that adequate disclosure is made in the
Registration Statement, any Preliminary Prospectus, the Prospectus, and any
supplement or amendment thereof, as required by the 1933 Act.
9. Representations and Agreements to Survive Delivery. The respective
--------------------------------------------------
representations, warranties, agreements and statements of the Company, the
Selling Securityholders and the Underwriters, as set forth in this Agreement or
made by or on behalf of them, respectively, pursuant to this Agreement, shall
remain operative and in full force and effect regardless of any investigation
(or any statement as to the results thereof) made by or on behalf of any
Underwriter or any controlling person of any Underwriter, or the Company or any
of its officers, directors or any controlling persons, or the Selling
Securityholders and shall survive delivery of and payment for the Shares
hereunder.
10. Substitution of Underwriters.
----------------------------
(a) If any Underwriter shall default in its obligation to purchase
the Shares which it has agreed to purchase hereunder, you may in your discretion
arrange for you or another party or other parties to purchase such Shares on the
terms contained herein. If within 36 hours after such default by any Underwriter
you do not arrange for the purchase of such Shares, then the Company shall be
entitled to a further period of 36 hours within which to procure another party
or parties reasonably satisfactory to you to purchase such Shares on such terms.
In the event that, within the respective prescribed periods, you notify the
Company that you have so arranged for the purchase of such Shares, or the
Company notifies you that it has so arranged for the purchase of such Shares,
you or the Company shall have the right to postpone the Closing Date for a
period of not more than seven days, in order to effect whatever changes may
thereby be made necessary in the Registration Statement or the Prospectus, or in
any other documents or arrangements, and the Company agrees to file promptly any
amendments to the Registration Statement or the Prospectus which in your opinion
may thereby be made necessary. The term "Underwriter" as used in this Agreement
shall include any persons substituted under this Section 10 with like effect as
if such person had originally been a party to this Agreement with respect to
such Shares.
(b) If, after giving effect to any arrangements for the purchase of
the Shares of a defaulting Underwriter or Underwriters made by you and the
Company as provided in subsection (a) above, the aggregate number of Shares
which remains unpurchased does not exceed one-eleventh of the total Shares to be
sold on the Closing Date, then the Company shall
-29-
have the right to require each non-defaulting Underwriter to purchase the Shares
which such Underwriter agreed to purchase hereunder and, in addition, to require
each non-defaulting Underwriter to purchase its pro rata share (based on the
number of Shares which such Underwriter agreed to purchase hereunder) of the
Shares of such defaulting Underwriter or Underwriters for which such
arrangements have not been made; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of
the Shares of a defaulting Underwriter or Underwriters made by you and the
Company as provided in subsection (a) above, the number of Shares which remains
unpurchased exceeds one-eleventh of the total Shares to be sold on the Closing
Date, or if the Company shall not exercise the right described in subsection (b)
above to require the non-defaulting Underwriters to purchase Shares of the
defaulting Underwriter or Underwriters, then this Agreement (or, with respect to
the Option Closing Date, the obligations of the Underwriters to purchase and of
the Company to sell the Option Shares) shall thereupon terminate, without
liability on the part of any non-defaulting Underwriter or the Company except
for the expenses to be borne by the Company and the Underwriters as provided in
Section 12 hereof and the indemnity and contribution agreements in Section 8
hereof; but nothing herein shall relieve a defaulting Underwriter from liability
for its default.
11. Effective Date and Termination.
------------------------------
(a) This Agreement shall become effective at 1:00 p.m., New York
time, on the first business day following the effective date of the Registration
Statement, or at such earlier time after the effective date of the Registration
Statement as you in your discretion shall first release the Shares for offering
to the public; provided, however, that the provisions of Section 8 and 12 shall
at all times be effective. For the purposes of this Section 11(a), the Shares
shall be deemed to have been released to the public upon release by you of the
publication of a newspaper advertisement relating to the Shares or upon release
of telegrams, facsimile transmissions or letters offering the Shares for sale to
securities dealers, whichever shall first occur.
(b) This Agreement may be terminated by you at any time before it
becomes effective in accordance with Section 11(a) by notice to the Company and
the Selling Securityholders; provided, however, that the provisions of this
-------- -------
Section 11 and of Section 8 and Section 12 hereof shall at all times be
effective. In the event of any termination of this Agreement pursuant to Section
10 or this Section 11(b), the Company and the Selling Securityholders shall not
then be under any liability to any Underwriter except as provided in Section 8
or Section 12 hereof.
(c) This Agreement may be terminated by you at any time at or prior
to the Closing Date by notice to the Company and the Selling Securityholders if
any condition specified in Section 8 hereof shall not have been satisfied on or
prior to the Closing Date. Any such termination shall be without liability of
any party to any other party except as provided in Sections 8 and 12 hereof.
-30-
(d) This Agreement also may be terminated by you by notice to the
Company and the Selling Securityholders as to any obligation of the Underwriters
to purchase the Option Shares, if any condition specified in Section 8 hereof
shall not have been satisfied at or prior to the Option Closing Date or as
provided in Section 10 of this Agreement.
If you terminate this Agreement as provided in Sections 11(b), 11(c)
or 11(d), you shall notify the Company and the Selling Securityholders by
telephone or telegram, confirmed by letter.
12. Costs and Expenses. The Company, whether or not the transactions
------------------
contemplated hereby are consummated or this Agreement is prevented from becoming
effective under Section 10 hereof or is terminated, agrees to bear and pay the
costs and expenses incident to the registration of the Shares and public
offering thereof, including, without limitation, (a) all expenses (including
stock transfer taxes) incurred in connection with the delivery to the several
Underwriters of the Shares, the filing fees of the SEC, the fees and expenses of
the Company's and the Selling Securityholders' counsel and accountants and the
fees and expenses of counsel for the Company and the Selling Securityholders,
(b) the preparation, printing, filing, delivery and shipping of the Registration
Statement, each Preliminary Prospectus, the Prospectus and any amendments or
supplements thereto (except as otherwise expressly provided in Section 6(d)
hereof) and, if applicable, the printing, delivery and shipping of this
Agreement and other underwriting documents, including the Agreement Among
Underwriters, the Selected Dealer Agreement, Underwriters' Questionnaires and
Powers of Attorney and Blue Sky Memoranda, and any instruments or documents
related to any of the foregoing, (c) the furnishing of copies of such documents
(except as otherwise expressly provided in Section 6(d) hereof) to the
Underwriters, (d) the registration or qualification of the Shares for offering
and sale under the securities laws of the various states and other
jurisdictions, including the fees and disbursements of counsel to the
Underwriters relating to such registration or qualification and in connection
with preparing any Blue Sky Memoranda or related analysis, (e) the filing fees
of the NASD, (f) all printing and engraving costs related to preparation of the
certificates for the Shares, including transfer agent and registrar fees, (g)
all fees and expenses relating to the listing of the Shares for trading on The
Nasdaq National Market, (h) all reasonable travel expenses, including air fare
and accommodation expenses, of representatives of the Company in connection with
the offering of the Shares, and (i) all of the other costs and expenses incident
to the performance by the Company of the registration and offering of the
Shares; provided, that the Underwriters will bear and pay the fees and expenses
of the Underwriters' counsel (except as provided in this Section 12), the
Underwriters' out-of-pocket expenses, and any advertising costs and expenses
incurred by the Underwriters incident to the public offering of the Shares.
If this Agreement is terminated by you in accordance with the provisions
Section 11(c), the Company shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the fees and disbursements of counsel to the
Underwriters.
13. Notices. All notices or communications hereunder, except as herein
-------
otherwise specifically provided, shall be in writing and if sent to the
Underwriters shall be mailed, delivered, sent by facsimile transmission, or
telegraphed and confirmed ▇/▇ ▇.▇. ▇▇▇▇▇▇▇ &
-▇▇-
▇▇▇▇, ▇▇▇. at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Director, Corporate Finance, facsimile number (▇▇▇) ▇▇▇-▇▇▇▇,
with a copy to ▇▇▇▇ ▇▇▇▇▇▇, General Counsel, facsimile number (▇▇▇) ▇▇▇-▇▇▇▇; if
sent to the Company shall be mailed, delivered, sent by facsimile transmission,
or telegraphed and confirmed to the Company at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, facsimile number (▇▇▇) ▇▇▇-▇▇▇▇; and if sent to the
Selling Securityholders shall be mailed, delivered, sent by facsimile
transmission, or telegraphed and confirmed in care of the Company at ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, facsimile number (▇▇▇) ▇▇▇-▇▇▇▇,
with in each case a copy to ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, facsimile
number (▇▇▇) ▇▇▇-▇▇▇▇. Notice to any Underwriter pursuant to Section 8 shall be
mailed, delivered, sent by facsimile transmission, or telegraphed and confirmed
to such Underwriter's address as it appears in the Underwriters' Questionnaire
furnished in connection with the offering of the Shares or as otherwise
furnished to the Company.
14. Information Furnished by Underwriters. The statements in the [first,
-------------------------------------
third, seventh and eighth] paragraphs under the caption "Underwriting" in the
Prospectus constitute the only information furnished by or on behalf of the
Underwriters through you as such information is referred to in Section 4(b) and
Section 8 hereof.
15. Parties. This Agreement shall inure to the benefit of and be binding
-------
upon the Underwriters, the Selling Securityholders, the Company, and, to the
extent provided in Sections 8 and 9, the officers and directors of the Company
and each person who controls the Company or any Underwriter and their respective
heirs, executors, administrators, successors and assigns. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any
person, corporation or other entity any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision herein contained;
this Agreement and all conditions and provisions hereof being intended to be and
being for the sole and exclusive benefit of the parties hereto and their
respective successors and assigns and said controlling persons and said officers
and directors, and for the benefit of no other person, corporation or other
entity. No purchaser of any of the Shares from any Underwriter shall be
construed a successor or assign by reason merely of such purchase.
In all dealings hereunder, you shall act on behalf of each of the several
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of the Underwriters, made or
given by you jointly or by ▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc. on behalf of you as the
representatives, as if the same shall have been made or given in writing by the
Underwriters.
16. Counterparts. This Agreement may be executed by any one or more of
------------
the parties hereto in any number of counterparts, each of which shall be deemed
to be an original, but all such counterparts shall together constitute one and
the same instrument.
17. Pronouns. Whenever a pronoun of any gender or number is used herein,
--------
it shall, where appropriate, be deemed to include any other gender and number.
18. Time of Essence. Time shall be of the essence of this Agreement.
---------------
-32-
19. Applicable Law. This Agreement shall be governed by, and construed in
--------------
accordance with, the laws of the State of Missouri, without giving effect to the
choice of law or conflict of laws principles thereof.
-33-
If the foregoing is in accordance with your understanding, please so
indicate in the space provided below for that purpose, whereupon this letter
shall constitute a binding agreement among the Company, each of the Selling
Securityholders and the Underwriters.
Any person executing and delivering this Agreement as Attorney-in-Fact for
a Selling Securityholder represents by so doing that he has been duly appointed
as Attorney-in-Fact by such Selling Securityholder pursuant to a validly
existing and binding Power-of-Attorney which authorizes such Attorney-in-Fact to
take such action.
Very truly yours,
MICROSEMI CORPORATION
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
SELLING SECURITYHOLDERS
Named in Schedule I
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
As Attorney-in-Fact acting on behalf of each
of the Selling Securityholders named in
Schedule I
Accepted in St. Louis,
Missouri as of the date first
above written, on behalf of
ourselves and each of the
several Underwriters named
in Schedule II hereto.
▇.▇. ▇▇▇▇▇▇▇ & SONS, INC.
CIBC World Markets Corp.
▇▇▇▇▇▇▇ & Company, Inc.
As Representatives of the Several
Underwriters named on Schedule II hereto
By: ▇.▇. ▇▇▇▇▇▇▇ & SONS, INC.
By:
-------------------------
Title:
----------------------
-34-
SCHEDULE I
Name Number of Shares to be Sold
---- --------------------------------
▇▇▇▇▇▇ ▇▇▇▇, ▇▇. 197,000
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 10,000
▇▇▇▇ ▇▇▇▇▇▇▇▇ 5,000
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 3,000
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 5,000
-1-
SCHEDULE II
Number of Selling
Number of Firm Shares Securityholder Shares
Underwriter to be Purchased to be Purchased
------------------------------ ------------------------------- ------------------------------
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc.
CIBC World Markets Corp.
▇▇▇▇▇▇▇ & Company, Inc.
Total
-1-
SCHEDULE III
Pursuant to Section 7(g) of the Underwriting Agreement,
PricewaterhouseCoopers LLP shall furnish letters to the Underwriters to the
effect that:
(i) They are independent certified public accountants with respect to
the Company and its subsidiaries within the meaning of the 1933 Act and the
applicable Rules and Regulations thereunder.
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules audited by them and included or incorporated
by reference in the Prospectus or the Registration Statement comply as to form
in all material respects with the applicable accounting requirements of the 1933
Act and the applicable Rules and Regulations with respect to registration
statements on Form S-3; and, if applicable, they have made a review in
accordance with standards established by the American Institute of Certified
Public Accountants of the unaudited consolidated interim financial statements,
selected financial data, and/or condensed financial statements, included or
incorporated by reference in the Prospectus or the Registration Statement,
derived from audited financial statements of the Company for the periods
specified in such letter, as indicated in their reports thereon, copies of which
have been furnished to the Representatives of the Underwriters (the
"Representatives").
(iii) On the basis of limited procedures, not constituting an audit in
accordance with generally accepted auditing standards, consisting of a reading
of the unaudited financial statements and other information referred to below,
performing the procedures specified by the AICPA for a review of interim
financial information as discussed in SAS No. 71, Interim Financial Information,
on the latest available interim financial statements of the Company and its
subsidiaries, included or incorporated by reference in the Prospectus or the
Registration Statement, reading of the minute books of the Company and its
subsidiaries since the date of the latest audited financial statements included
in the Prospectus, inquiries of officials of the Company and its subsidiaries
responsible for financial and accounting matters and such other inquiries and
procedures as may be specified in such letter, nothing came to their attention
that caused them to believe that:
(A) any material modifications should be made to the unaudited
consolidated balance sheets, consolidated income statements, and
consolidated statements of cash flows included or incorporated by
reference in the Prospectus for them to be in conformity with generally
accepted accounting principles, or such statements do not comply as to
form in all material respects with the applicable accounting
requirements of the 1933 Act and the related published Rules and
Regulations thereunder.
(B) any other unaudited income statement data and balance sheet
items identified in the letter and included in the Prospectus do not
agree with the corresponding items in the unaudited consolidated
financial statements from which such data and items were derived, and
any such unaudited data and items were not determined on a basis
substantially consistent
-1-
with the basis for the corresponding amounts in the audited
consolidated financial statements included in the Prospectus.
(C) as of a specified date not more than five days prior to the
date of such letter, there have been any changes in the consolidated
capital stock or any increase in the consolidated long-term debt of the
Company and its subsidiaries, or any decreases in consolidated working
capital, net current assets or net assets, or any changes in any other
items specified by the Representatives, in each case as compared with
amounts shown in the latest balance sheet included in the Prospectus,
except in each case for changes, increases or decreases which the
Prospectus discloses have occurred or may occur or which are described
in such letter.
(D) for the period from the date of the latest financial
statements included in the Prospectus to the specified date referred to
in Clause (C) there were any decreases in consolidated net sales or
income from operations or the total or per share amounts of
consolidated net income or any changes in any other items specified by
the Representatives, in each case as compared with the comparable
period of the preceding year and with any other period of corresponding
length specified by the Representatives, except in each case for
changes, decreases or increases which the Prospectus discloses have
occurred or may occur or which are described in such letter.
(iv) In addition to the audit referred to in their report(s) included
in the Prospectus and the limited procedures, reading of minute books, inquiries
and other procedures referred to in paragraph (iii) above, they have carried out
certain specified procedures, not constituting an audit in accordance with
generally accepted auditing standards, with respect to certain amounts,
percentages and financial information specified by the Representatives, which
are derived from the general accounting records of the Company and its
subsidiaries for the periods covered by their reports and any interim or other
periods since the latest period covered by their reports, which appear in the
Prospectus, or in Part II of, or in exhibits and schedules to, the Registration
Statement specified by the Representatives, and have compared certain of such
amounts, percentages and financial information with the accounting records of
the Company and its subsidiaries and have found them to be in agreement.
-2-
