EXHIBIT 1.1
____________________ SHARES
DDI CORP.
COMMON STOCK
UNDERWRITING AGREEMENT
___________, 2000
CREDIT SUISSE FIRST BOSTON CORPORATION,
As Representative of the Several Underwriters,
Eleven Madison Avenue,
New York, N.Y.10010-3629
Dear Sirs:
1. Introductory. DDi Corp., a California corporation ("DDI") proposes
that DDi Corp., a Delaware corporation into which it will merge ("DDI MERGER
CO.") will issue and sell __________ shares of its common stock, par value $.01
per share ("SECURITIES" and such _________ shares of Securities being
hereinafter referred to as the "FIRM SECURITIES"), following completion of the
Reclassification (as defined herein) For purposes of this Agreement, the
"COMPANY" shall mean (a), for all periods prior to the Reclassification, DDi and
(b), for all periods following the Reclassification, DDi Merger Co. (which shall
be named DDi Corp. upon completion of the Reclassification). The Company also
proposes to sell to the Underwriters, at the option of the Underwriters, an
aggregate of not more than _________ additional shares of its Securities (such
______________ additional shares being hereinafter referred to as the "OPTIONAL
SECURITIES"). The Firm Securities and the Optional Securities are herein
collectively called the "OFFERED SECURITIES". As part of the offering
contemplated by this Agreement, Credit Suisse First Boston Corporation (the
"DESIGNATED UNDERWRITER") has agreed to reserve out of the Firm Securities
purchased by it under this Agreement, up to _____________ shares, for sale to
the Company's directors, officers, employees and other parties associated with
the Company (collectively, "PARTICIPANTS"), as set forth in the Prospectus (as
defined herein) under the heading "Underwriting" (the "DIRECTED SHARE PROGRAM").
The Firm Securities to be sold by the Designated Underwriter pursuant to the
Directed Share Program (the "DIRECTED SHARES") will be sold by the Designated
Underwriter pursuant to this Agreement at the public offering price. Any
Directed Shares not subscribed for by the end of this business day on which this
Agreement is executed will be offered to the public by the Underwriters as set
forth in the Prospectus. On or
soon after the Closing Date (as defined herein), pursuant to a Share Purchase
Agreement (the "PURCHASE AGREEMENT") dated March 22, 2000 by and between the
Company and the shareholders of MCM Electronics Limited ("MCM"), DDi Merger Co.
will acquire all of the outstanding capital stock of MCM (the "ACQUISITION") for
a purchase price of approximately $___ million, payable in cash, _________
shares of Securities and the assumption of $______ million in debt (the
"ACQUISITION CONSIDERATION").
The Company hereby agrees with the several Underwriters named in Schedule A
hereto ("UNDERWRITERS") as follows:
2. Representations and Warranties of the Company. DDi and DDi Merger Co.
represent and warrant to, and agree with, the several Underwriters that:
(1) A registration statement (No. 333-95623) relating to the Offered
Securities, including a form of prospectus, has been filed with the Securities
and Exchange Commission ("COMMISSION") and either (A) has been declared
effective under the Securities Act of 1933 ("ACT") and is not proposed to be
amended or (B) is proposed to be amended by amendment or post-effective
amendment. If such registration statement (the "INITIAL REGISTRATION STATEMENT")
has been declared effective, either (A) an additional registration statement
(the "ADDITIONAL REGISTRATION STATEMENT") relating to the Offered Securities may
have been filed with the Commission pursuant to Rule 462(b) ("RULE 462(B)")
under the Act and, if so filed, has become effective upon filing pursuant to
such Rule and the Offered Securities all have been duly registered under the Act
pursuant to the initial registration statement and, if applicable, the
additional registration statement or (B) such an additional registration
statement is proposed to be filed with the Commission pursuant to Rule 462(b)
and will become effective upon filing pursuant to such Rule and upon such filing
the Offered Securities will all have been duly registered under the Act pursuant
to the initial registration statement and such additional registration
statement. If the Company does not propose to amend the initial registration
statement or if an additional registration statement has been filed and the
Company does not propose to amend it, and if any post-effective amendment to
either such registration statement has been filed with the Commission prior to
the execution and delivery of this Agreement, the most recent amendment (if any)
to each such registration statement has been declared effective by the
Commission or has become effective upon filing pursuant to Rule 462(c) ("RULE
462(C)") under the Act or, in the case of the additional registration statement,
Rule 462(b). For purposes of this Agreement, "EFFECTIVE TIME" with respect to
the initial registration statement or, if filed prior to the execution and
delivery of this Agreement, the additional registration statement means (A) if
the Company has advised the Representative that it does not propose to amend
such registration statement, the date and time as of which such registration
statement, or the most recent post-effective amendment thereto (if any) filed
prior to the execution and delivery of this Agreement, was declared effective by
the Commission or has become effective upon filing pursuant to Rule 462(c), or
(B) if the Company has advised the Representative that it proposes to file an
amendment or post-effective amendment to such registration statement, the date
and time as of which such registration statement, as amended by such amendment
or post-effective
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amendment, as the case may be, is declared effective by the Commission. If an
additional registration statement has not been filed prior to the execution and
delivery of this Agreement but the Company has advised the Representative that
it proposes to file one, "EFFECTIVE TIME" with respect to such additional
registration statement means the date and time as of which such registration
statement is filed and becomes effective pursuant to Rule 462(b). "EFFECTIVE
DATE" with respect to the initial registration statement or the additional
registration statement (if any) means the date of the Effective Time thereof.
The initial registration statement, as amended at its Effective Time, including
all information contained in the additional registration statement (if any) and
deemed to be a part of the initial registration statement as of the Effective
Time of the additional registration statement pursuant to the General
Instructions of the Form on which it is filed and including all information (if
any) deemed to be a part of the initial registration statement as of its
Effective Time pursuant to Rule 430A(b) ("RULE 430A(B)") under the Act, is
hereinafter referred to as the "INITIAL REGISTRATION STATEMENT". The additional
registration statement, as amended at its Effective Time, including the contents
of the initial registration statement incorporated by reference therein and
including all information (if any) deemed to be a part of the additional
registration statement as of its Effective Time pursuant to Rule 430A(b), is
hereinafter referred to as the "ADDITIONAL REGISTRATION STATEMENT". The Initial
Registration Statement and the Additional Registration Statement are hereinafter
referred to collectively as the "REGISTRATION STATEMENTS" and individually as a
"REGISTRATION STATEMENT". The form of prospectus relating to the Offered
Securities, as first filed with the Commission pursuant to and in accordance
with Rule 424(b) ("RULE 424(B)") under the Act or (if no such filing is
required) as included in a Registration Statement, is hereinafter referred to as
the "PROSPECTUS". No document has been or will be prepared or distributed in
reliance on Rule 434 under the Act.
(2) If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement: (A) on the Effective Date
of the Initial Registration Statement, the Initial Registration Statement
conformed in all respects to the requirements of the Act and the rules and
regulations of the Commission ("RULES AND REGULATIONS") and did not include any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading,
(B) on the Effective Date of the Additional Registration Statement (if any),
each Registration Statement conformed or will conform, in all respects to the
requirements of the Act and the Rules and Regulations and did not include, or
will not include, any untrue statement of a material fact and did not omit, or
will not omit, to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and (C) on the date of
this Agreement, the Initial Registration Statement and, if the Effective Time of
the Additional Registration Statement is prior to the execution and delivery of
this Agreement, the Additional Registration Statement each conforms, and at the
time of filing of the Prospectus pursuant to Rule 424(b) or (if no such filing
is required) at the Effective Date of the Additional Registration Statement in
which the Prospectus is included, each Registration Statement and the Prospectus
(as amended or supplemented) will conform, in all respects to the requirements
of the Act and the Rules and Regulations, and neither of such documents
includes, or will include, 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
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statements therein not misleading. If the Effective Time of the Initial
Registration Statement is subsequent to the execution and delivery of this
Agreement: on the Effective Date of the Initial Registration Statement, the
Initial Registration Statement and the Prospectus will conform in all respects
to the requirements of the Act and the Rules and Regulations, neither of such
documents will include any untrue statement of a material fact or will omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading, and no Additional Registration Statement has
been or will be filed. The two preceding sentences do not apply to statements in
or omissions from a Registration Statement or the Prospectus based upon written
information furnished to the Company by any Underwriter through the
Representative specifically for use therein, it being understood and agreed that
the only such information is that described as such in Section 7(b) hereof.
(3) DDi has been duly incorporated and is an existing corporation in
good standing under the laws of the State of California, with power and
authority (corporate and other) to own its properties and conduct its business
as described in the Prospectus; and the Company is duly qualified to do business
as a foreign corporation in good standing in all other jurisdictions in which
its ownership or lease of property or the conduct of its business requires such
qualification.
(4) Prior to the Closing Date (as defined herein), the Company shall
have completed: (a) the reincorporation of DDi in Delaware through the merger of
DDi into DDi Merger Co. and (b) at the time of such reincorporation, the
conversion of DDi's Class L common stock and Class A common stock, as
contemplated in the Prospectus under the caption "The Reclassification"
(collectively, the "RECLASSIFICATION"); upon completion of the Reclassification,
DDi Merger Co. will have assumed all the rights and obligations of DDi and there
will be one class of common stock, the Securities; the Company will be duly
incorporated and an existing corporation in good standing under the laws of the
State of Delaware, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus; and the
Company will be duly qualified to do business as a foreign corporation in good
standing in all other jurisdictions in which its ownership or lease of property
or the conduct of its business requires such qualification.
(5) Each subsidiary of the Company has been, and after giving effect
to the Acquisition pursuant to the terms of the Purchase Agreement will have
been, duly incorporated and is, and after giving effect to the Acquisition
pursuant to the terms of the Purchase Agreement will be, an existing corporation
in good standing under the laws of the jurisdiction of its incorporation, with
power and authority (corporate and other) to own its properties and conduct its
business as described in the Prospectus; and each subsidiary of the Company is,
and after giving effect to the Acquisition pursuant to the terms of the Purchase
Agreement will be, duly qualified to do business as a foreign corporation in
good standing in all other jurisdictions in which its ownership or lease of
property or the conduct of its business requires such qualification except where
the failure to be so qualified would not individually or in the aggregate have a
material adverse effective on the condition (financial or other), business,
properties or results of
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operations of the Company and its subsidiaries taken as a whole ("MATERIAL
ADVERSE EFFECT"); all of the issued and outstanding capital stock of each
subsidiary of the Company has been, and after giving effect to the Acquisition
pursuant to the terms of the Purchase Agreement will have been, duly authorized
and validly issued and is fully paid and nonassessable; and the capital stock of
each subsidiary owned by the Company, directly or through subsidiaries, is, and
after giving effect to the Acquisition pursuant to the terms of the Purchase
Agreement will be, owned free from liens, encumbrances and defects, except as
described in the Prospectus under the caption "Description of Indebtedness -
Dynamic Details Senior Credit Facility."
(6) The Company has an authorized capitalization as set forth in the
Prospectus under the heading "Capitalization" in the column entitled "Actual"
and upon completion of the issue and sale of the Firm Securities and the use of
the proceeds therefrom, as contemplated in the Prospectus, and completion of the
Acquisition, as described in the Prospectus (as amended or supplemented), will
have the capitalization as set forth in the column entitled "Pro Forma
Combined;" and all outstanding shares of capital stock of the Company have been
duly authorized and validly issued, fully paid and are nonassessable and conform
to the description thereof contained in the Prospectus (as amended or
supplemented); and the stockholders of the Company have no preemptive rights
with respect to the Securities.
(7) Upon completion of the Reclassification and the Acquisition, all
outstanding shares of capital stock of the Company will have been duly
authorized and validly issued, fully paid and will be non-assessable and will
conform to the description thereof in the Prospectus; and upon their issuance
and sale pursuant to this Agreement, all Firm Securities will have been duly
authorized and validly issued, fully paid and non-assessable and will conform to
the description thereof contained in the Prospectus.
(8) Except as disclosed in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person that would give
rise to a valid claim against the Company or any Underwriter for a brokerage
commission, finder's fee or other like payment in connection with this offering.
(9) There are no contracts, agreements or understandings between the
Company and any person granting such person the right (i) to require the Company
to file a registration statement under the Act with respect to any securities of
the Company owned or to be owned by such person or (ii) to require the Company
to include such securities in the securities registered pursuant to the
Registration Statement or (iii) to require the Company to include such
securities in any securities being registered pursuant to any other registration
statement filed by the Company under the Act, except in the case of (i) and
(iii), as described in the Prospectus and in the case of (ii) as have been
satisfied or waived.
(10) The Securities have been approved for listing subject to notice
of issuance on The Nasdaq Stock Market's National Market.
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(11) No consent, approval, authorization, or order of, or filing with,
any governmental agency or body or any court is required to be obtained or made
by the Company for the consummation of the transactions contemplated by this
Agreement in connection with the sale of the Offered Securities or for the
consummation of the transactions contemplated by the Purchase Agreement, except
such as have been obtained and made under the Act and such as may be required
under state securities laws or by the NASD.
(12) The (a) execution, delivery and performance of this Agreement,
and the consummation of the transactions herein contemplated (including but not
limited to the sale of the Offered Securities by the Company and the use of the
proceeds therefrom as described in the Prospectus, as amended or supplemented)
and (b) the execution, delivery and performance of the Purchase Agreement
(including but not limited to the purchase of the capital stock of MCM and the
payment of the Acquisition Consideration) will not result in a breach or
violation of any of the terms and provisions of, or constitute a default under,
(i) any statute, any rule, regulation or order of any governmental agency or
body or any court, domestic or foreign, having jurisdiction over the Company or
any subsidiary of the Company or of MCM or any of their properties, or (ii) any
agreement or instrument to which the Company or any such subsidiary is a party
or by which the Company or any such subsidiary or of MCM is bound or to which
any of the properties of the Company or any such subsidiary is subject, or (iii)
the charter or by-laws of the Company (before or after the Reclassification) or
any such subsidiary, except in the case of (ii), for such breach or violation
that would not, individually or in the aggregate, have a Material Adverse
Effect.
(13) Each of this Agreement and the Purchase Agreement has been duly
authorized, executed and delivered by the Company.
(14) Except as disclosed in the Prospectus, the Company and its
subsidiaries have, and after giving effect to the Acquisition pursuant to the
terms of the Purchase Agreement will have, good and marketable title to all real
properties owned by them and personal property reflected as owned in the
financial statements described in paragraph (xx) below and not disposed of in
the ordinary course of business since December 31, 1999, plus any personal
property acquired since December 31, 1999, in each case that are material to the
business of the Company and its subsidiaries taken as a whole and in each case
free from liens, encumbrances and defects that would materially affect the value
thereof or materially interfere with the use made or to be made thereof by them;
and except as disclosed in the Prospectus, the Company and its subsidiaries
hold, and after giving effect to the Acquisition pursuant to the terms of the
Purchase Agreement will hold, any leased real or personal property that are
material to the business of the Company and its subsidiaries taken as a whole
under valid and enforceable leases, with no exceptions that would materially
interfere with the use made or to be made thereof by them.
(15) The Company and its subsidiaries possess, and after giving effect
to the Acquisition pursuant to the terms of the Purchase Agreement will possess,
adequate certificates,
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authorities or permits issued by appropriate governmental agencies or bodies
necessary to conduct the business now operated by them and have not received any
notice of proceedings relating to the revocation or modification of any such
certificate, authority or permit that, if determined adversely to the Company or
any of its subsidiaries, would individually or in the aggregate have a Material
Adverse Effect.
(16) No labor dispute with the employees of the Company or any
subsidiary exists, or after giving effect to the Acquisition pursuant to the
terms of the Purchase Agreement will exist, or, to the knowledge of the Company,
is imminent that might have a Material Adverse Effect.
(17) The Company and its subsidiaries own, possess or can acquire, or
after giving effect to the Acquisition pursuant to the terms of the Purchase
Agreement will own, possess or will be able to acquire, on reasonable terms,
adequate trademarks, trade names and other rights to inventions, know-how,
patents, copyrights, confidential information and other intellectual property
(collectively, "INTELLECTUAL PROPERTY RIGHTS") necessary to conduct the business
now operated by them, or presently employed by them, and have not received any
notice of infringement of or conflict with asserted rights of others with
respect to any intellectual property rights that, if determined adversely to the
Company or any of its subsidiaries, would individually or in the aggregate have
a Material Adverse Effect.
(18) Except as disclosed in the Prospectus, neither the Company nor
any of its subsidiaries is, and upon completion of the Acquisition pursuant to
the terms of the Purchase Agreement will be, in violation of any statute, any
rule, regulation, decision or order of any governmental agency or body or any
court, domestic or foreign, relating to the use, disposal or release of
hazardous or toxic substances or relating to the protection or restoration of
the environment or human exposure to hazardous or toxic substances
(collectively, "ENVIRONMENTAL LAWS"), owns or operates any real property
contaminated with any substance that is subject to any environmental laws, is
liable for any off-site disposal or contamination pursuant to any environmental
laws, or is subject to any claim relating to any environmental laws, which
violation, contamination, liability or claim would individually or in the
aggregate have Material Adverse Effect; and the Company is not aware of any
pending investigation which might lead to such a claim.
(19) Except as disclosed in the Prospectus, there are, and upon
completion of the Acquisition pursuant to the terms of the Purchase Agreement
there will be, no pending actions, suits or proceedings against or affecting the
Company, any of its subsidiaries or any of their respective properties that, if
determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a Material Adverse Effect, or would
materially and adversely affect the ability of the Company to perform its
obligations under this Agreement, or which are otherwise material in the context
of the sale of the Offered Securities; and no such actions, suits or proceedings
are, to the Company's knowledge, threatened or contemplated.
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(20) Each of PricewaterhouseCoopers LLP, who have certified the
financial statements of the Company and KPMG Audit Plc who have certified the
financial statements of MCM included in the Registration Statements, are
independent public accountants as required by the Act and the Rules and
Regulations. The financial statements included in each Registration Statement
and the Prospectus present fairly, in all material respects, the financial
position of the Company and its consolidated subsidiaries as of the dates shown
and their results of operations and cash flows for the periods shown, and such
financial statements have been prepared in conformity with the generally
accepted accounting principles in the United States applied on a consistent
basis; and the pro forma consolidated financial data contained in each
Registration Statement and the Prospectus have been prepared on a basis
consistent with the historical financial statements, includes all material
adjustments to the historical financial information required by Rule 11-02 of
Regulation S-X under the Act and the Securities Exchange Act of 1934 ("EXCHANGE
ACT") to reflect the transactions described therein the assumptions used in
preparing the pro forma financial statements and other data (including, but not
limited to "adjusted EBITDA") included in each Registration Statement and the
Prospectus provide a reasonable basis for presenting the significant effects
directly attributable to the transactions or events described therein, the
related pro forma adjustments give appropriate effect to those assumptions, and
the pro forma columns therein reflect the proper application of those
adjustments to the corresponding historical financial statement amounts.
(21) Except as disclosed in the Prospectus, since the date of the
latest audited financial statements included in the Prospectus there has been,
and after giving effect to the Acquisition pursuant to the terms of the Purchase
Agreement will be, no material adverse change, nor any development or event
involving a prospective material adverse change, in the condition (financial or
otherwise), business, properties or results of operations of the Company and its
subsidiaries takes as a whole, and, except as disclosed in or contemplated by
the Prospectus, there has been no dividend or distribution of any kind declared,
paid or made by the Company on any class of its capital stock.
(22) The Company is not and, after giving effect to the offering and
sale of the Offered Securities and the application of the proceeds thereof as
described in the Prospectus and the Acquisition pursuant to the terms of the
Purchase Agreement, will not be an "investment company" as defined in the
Investment Company Act of 1940.
(23) Furthermore, the Company represents and warrants to the
Underwriters that the Participants in the Directed Share Program identified to
the Designated Underwriter do not include persons located outside the United
States.
(24) The Company has not offered, or caused the Underwriters to offer,
any offered Securities to any person pursuant to the Directed Share Program with
the specific intent to unlawfully influence (i) a customer or supplier of the
Company to alter the customer's or supplier's level or type of business with the
Company or (ii) a trade journalist or publication to write or publish favorable
information about the Company of its products.
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(25) Neither the Company nor any of its subsidiaries is, nor upon
completion of the Acquisition pursuant to the terms of the Purchase Agreement
will be, in violation of its charter or by-laws, as the case may be, or in
default (or would be in default with notice or lapse of time, or both) in the
performance or observance of any material obligation, agreement, covenant or
condition contained in any material bond, debenture, note or other evidence of
indebtedness or in any material contract, indenture, mortgage, deed of trust,
loan or credit agreement, lease, joint venture or other agreement or instrument
to which the Company or any of its subsidiaries is a party or by which any of
their properties may be bound, which default or defaults would have a Material
Adverse Effect, or in violation of any law, order, rule, regulation, writ,
injunction, judgment or decree of any court or governmental agency or body, the
violation of which would have a Material Adverse Effect.
(26) Neither the Company nor any of its directors, officers or
affiliates (as defined in the Rules and Regulations) has taken or will take,
directly or indirectly, any action designed to cause or result in, or which
constitutes or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the shares of the Securities to
facilitate the sale or resale of the Offered Securities.
(27) The Company, its subsidiaries and MCM have filed all federal,
state, local and foreign tax returns that have been required to be filed and
have paid all taxes shown thereon and all assessments received by them or any of
them to the extent that such taxes have become due and are not being contested
in good faith. Except as disclosed in the Registration Statement and the
Prospectus, there is no tax deficiency that has been or might reasonably be
expected to be asserted or, to the Company's knowledge, threatened against the
Company or any of its subsidiaries, that would have a Material Adverse Effect.
(28) No relationship, direct or indirect, exists between or among the
Company or any of its affiliates, on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company or any of its subsidiaries,
on the other hand, that is required by the Act to be described in the
Registration Statement and the Prospectus that is not so described.
(29) Each employee benefit plan, within the meaning of Section 3(3) of
the Employee Retirement Income Securities Act of 1974, as amended ("ERISA"),
that is maintained, administered or contributed to by the Company or any of its
subsidiaries for employees or former employees of the Company or any of its
subsidiaries has been maintained in compliance, in all material respects, with
its respective terms and the requirements of any applicable statutes, order,
rules and regulations, including but not limited to ERISA and the Internal
Revenue Code of 1986, as amended (the "Code"), except for such non-compliance
that would not result in a Material Adverse Effect. No prohibited transaction,
within the meaning of Section 406 of ERISA or Section 4975 of the Code, has
occurred with respect to any such plan, excluding transactions effected pursuant
to a statutory or administrative exemption or transactions that would not have a
Material Adverse Effect. For each such plan that is subject to the funding rules
9
of Section 412 of the Code or Section 302 of ERISA, no "accumulated funding
deficiency", as defined in Section 412 of the Code, has been incurred, whether
or not waived, and the fair market value of the assets of each such plan
(excluding for these purposes accrued but unpaid contributions) exceeded the
present value of all benefits accrued under such plan determined using
reasonable actuarial assumptions.
(30) The Company and each of its subsidiaries maintain, and upon
completion of the Acquisition pursuant to the terms of the Purchase Agreement
will maintain, a system of internal accounting controls that, taken as a whole,
are sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific authorizations;
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(31) The Company and each of its subsidiaries maintain, and upon
completion of the Acquisition pursuant to the terms of the Purchase Agreement
will maintain, insurance of the types and in the amounts that the Company
reasonably deems adequate for their respective business, including, without
limitation, insurance coverage on real and personal property owned or leased by
them against theft, damage, destruction, acts of vandalism and all other
material risks customarily insured against, all of which insurance is in full
force and effect. Neither the Company nor any of its subsidiaries has any reason
to believe that it will not be able to renew existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its respective business.
(32) There are no contracts or documents which are required to be
described in the Registration Statement or the Prospectus or to be filed as
exhibits thereto which have not been so described and filed as required.
3. Purchase, Sale and Delivery of Offered Securities. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to sell to each
Underwriter, and each Underwriter agrees, severally and not jointly, to purchase
from the Company, at a purchase price of $________ per share, that number of
Firm Securities set forth opposite the name of such Underwriter in Schedule A
hereto.
The Company will deliver the Firm Securities to the Representative for the
accounts of the Underwriters, against payment of the purchase price in Federal
(same day) funds by official bank check or checks or wire transfer to an account
at a bank acceptable to Credit Suisse First Boston Corporation ("CSFBC") drawn
to the order of _______________, at the office of Skadden, Arps, Slate, ▇▇▇▇▇▇▇
& ▇▇▇▇ LLP, Four Times Square, New York, NY, at [9:00] A.M., New York time, on
____________ ___, 2000, or at such other time not later than seven
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full business days thereafter as CSFBC and the Company determine, such time
being herein referred to as the "FIRST CLOSING DATE". The certificates for the
Firm Securities so to be delivered will be in definitive form, in such
denominations and registered in such names as CSFBC requests and will be made
available for checking and packaging at the above office of Skadden, Arps,
Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP at least 24 hours prior to the First Closing Date.
In addition, upon written notice from CSFBC given to the Company from time
to time not more than 30 days subsequent to the date of the Prospectus, the
Underwriters may purchase all or less than all of the Optional Securities at the
purchase price per Security to be paid for the Firm Securities. The Company
agrees to sell to the Underwriters the number of Optional Securities specified
in such notice and the Underwriters agree, severally and not jointly, to
purchase such Optional Securities. Such Optional Securities shall be purchased
from the Company for the account of each Underwriter in the same proportion as
the number of Firm Securities set forth opposite such Underwriter's name bears
to the total number of Firm Securities (subject to adjustment by CSFBC to
eliminate fractions) and may be purchased by the Underwriters only for the
purpose of covering over-allotments made in connection with the sale of the Firm
Securities. No Optional Securities shall be sold or delivered unless the Firm
Securities previously have been, or simultaneously are, sold and delivered. The
right to purchase the Optional Securities or any portion thereof may be
exercised from time to time and to the extent not previously exercised may be
surrendered and terminated at any time upon notice by CSFBC to the Company.
Each time for the delivery of and payment for the Optional Securities,
being herein referred to as an "OPTIONAL CLOSING Date", which may be the First
Closing Date (the First Closing Date and each Optional Closing Date, if any,
being sometimes referred to as a "CLOSING DATE"), shall be determined by CSFBC
but shall be not later than five full business days after written notice of
election to purchase Optional Securities is given. The Company will deliver the
Optional Securities being purchased on each Optional Closing Date to the
Representative for the accounts of the several Underwriters, against payment of
the purchase price therefor in Federal (same day) funds by official bank check
or checks or wire transfer to an account at a bank acceptable to CSFBC drawn to
the order of ________________, at the above office of Skadden, Arps, Slate,
▇▇▇▇▇▇▇ & ▇▇▇▇ LLP. The certificates for the Optional Securities being purchased
on each Optional Closing Date will be in definitive form, in such denominations
and registered in such names as CSFBC requests upon reasonable notice prior to
such Optional Closing Date and will be made available for checking and packaging
at the above office of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP at a reasonable
time in advance of such Optional Closing Date.
4. Offering by Underwriters. It is understood that the several Underwriters
propose to offer the Offered Securities for sale to the public as set forth in
the Prospectus.
5. Certain Agreements of DDi and DDi Merger Co.. DDi and DDi Merger Co.
agree with the several Underwriters that:
11
(1) If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement, the Company will file the
Prospectus with the Commission pursuant to and in accordance with subparagraph
(1) (or, if applicable and if consented to by CSFBC, subparagraph (4)) of Rule
424(b) not later than the earlier of (A) the second business day following the
execution and delivery of this Agreement or (B) the fifteenth business day after
the Effective Date of the Initial Registration Statement.
The Company will advise CSFBC promptly of any such filing pursuant to
Rule 424(b). If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement and an additional
registration statement is necessary to register a portion of the Offered
Securities under the Act but the Effective Time thereof has not occurred as of
such execution and delivery, the Company will file the additional registration
statement or, if filed, will file a post-effective amendment thereto with the
Commission pursuant to and in accordance with Rule 462(b) on or prior to 10:00
P.M., New York time, on the date of this Agreement or, if earlier, on or prior
to the time the Prospectus is printed and distributed to any Underwriter, or
will make such filing at such later date as shall have been consented to by
CSFBC.
(2) The Company will advise CSFBC promptly of any proposal to amend or
supplement the initial or any additional registration statement as filed or the
related prospectus or the Initial Registration Statement, the Additional
Registration Statement (if any) or the Prospectus and will not effect such
amendment or supplementation without CSFBC's consent; and the Company will also
advise CSFBC promptly of the effectiveness of each Registration Statement (if
its Effective Time is subsequent to the execution and delivery of this
Agreement) and of any amendment or supplementation of a Registration Statement
or the Prospectus and of the institution by the Commission of any stop order
proceedings in respect of a Registration Statement and will use its best efforts
to prevent the issuance of any such stop order and to obtain as soon as possible
its lifting, if issued.
(3) If, at any time when a prospectus relating to the Offered
Securities is required to be delivered under the Act in connection with sales by
any Underwriter or dealer, any event occurs as a result of which the Prospectus
as then amended or supplemented would include an untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or if it is necessary at any time to amend the Prospectus to comply
with the Act, the Company will promptly notify CSFBC of such event and will
promptly prepare and file with the Commission, at its own expense, an amendment
or supplement which will correct such statement or omission or an amendment
which will effect such compliance. Neither CSFBC's consent to, nor the
Underwriters' delivery of, any such amendment or supplement shall constitute a
waiver of any of the conditions set forth in Section 6.
(4) As soon as practicable, but not later than the Availability Date
(as defined below), the Company will make generally available to its
securityholders an earnings statement (which need not be audited) covering a
period of at least 12 months beginning after the Effective
12
Date of the Initial Registration Statement (or, if later, the Effective Date of
the Additional Registration Statement) which will satisfy the provisions of
Section 11(a) of the Act. For the purpose of the preceding sentence,
"AVAILABILITY DATE" means the 45th day after the end of the fourth fiscal
quarter following the fiscal quarter that includes such Effective Date, except
that, if such fourth fiscal quarter is the last quarter of the Company's fiscal
year, "Availability Date" means the 90th day after the end of such fourth fiscal
quarter.
(5) The Company will furnish to the Representative copies of each
Registration Statement, four of which will be signed and will include all
exhibits, each related preliminary prospectus, and, so long as a prospectus
relating to the Offered Securities is required to be delivered under the Act in
connection with sales by any Underwriter or dealer, the Prospectus and all
amendments and supplements to such documents, in each case in such quantities as
CSFBC requests. The Prospectus shall be so furnished on or prior to 3:00 P.M.,
New York time, on the business day following the later of the execution and
delivery of this Agreement or the Effective Time of the Initial Registration
Statement. All other such documents shall be so furnished as soon as available.
(6) The Company will arrange for the qualification of the Offered
Securities for sale under the laws of such jurisdictions as CSFBC designates and
will continue such qualifications in effect so long as required for the
distribution, provided that in connection therewith the Company shall not be
required to qualify as a foreign corporation or to take any action that would
subject it to a general consent to service of process in any jurisdiction.
(7) During the period of five years hereafter, the Company will
furnish to the Representative and, upon request, to each of the other
Underwriters, as soon as practicable after the end of each fiscal year, a copy
of its annual report to stockholders for such year; and the Company will furnish
to the Representative (i) as soon as available, a copy of each report and any
definitive proxy statement of the Company filed with the Commission under the
Exchange Act or mailed to stockholders, and (ii) from time to time, such other
information concerning the Company as CSFBC may reasonably request.
(8) For a period of 180 days after the date of the initial public
offering of the Offered Securities, the Company will not offer, sell, contract
to sell, pledge or otherwise dispose of, directly or indirectly, or file with
the Commission a registration statement under the Act relating to, any
additional shares of its Securities or securities convertible into or
exchangeable or exercisable for any shares of its Securities, or publicly
disclose the intention to make any such offer, sale, pledge, disposition or
filing, without the prior written consent of CSFBC, except grants of employee
stock options pursuant to the terms of a plan in effect on the date hereof,
issuances of Securities pursuant to the exercise of such options or the exercise
of any other employee stock options outstanding on the date hereof or issuances
of Securities pursuant to the Company's dividend reinvestment plan.
13
(9) The Company agrees with the several Underwriters that the Company
will pay all expenses incident to the performance of the obligations of the
Company under this Agreement, for any filing fees and other expenses (including
reasonable fees and disbursements of counsel) in connection with qualification
of the Offered Securities for sale under the laws of such jurisdictions as CSFBC
designates, subject to paragraph (f) above, and the printing of memoranda
relating thereto, for the filing fee incident to, and the reasonable fees and
disbursements of counsel to the Underwriters in connection with, the review by
the National Association of Securities Dealers, Inc. (the "NASD") of the Offered
Securities, for any travel expenses of the Company's officers and employees and
any other expenses of the Company in connection with attending or hosting
meetings with prospective purchasers of the Offered Securities and for expenses
incurred in distributing preliminary prospectuses and the Prospectus (including
any amendments and supplements thereto) to the Underwriters.
(10) In connection with the Directed Share Program, the Company will
ensure that the Directed Shares will be restricted to the extent required by the
NASD or the NASD rules from sale, transfer, assignment, pledge or hypothecation
for a period of three months following the date of the effectiveness of the
Registration Statement. The Designated Underwriter will notify the Company as to
which Participants will need to be so restricted. The Company will direct the
transfer agent to place stop transfer restrictions upon such securities for such
period of time.
(11) The Company will pay all fees and disbursements of counsel
incurred by the Underwriters in connection with the Directed Share Program and
stamp duties, similar taxes or duties or other taxes, if any, incurred by the
Underwriters in connection with the Directed Share Program.
(12) In connection with the Reclassification, DDi Merger Co. will
assume all the rights and obligations of DDi, including, but not limited to,
those contained in this Agreement.
Furthermore, the Company covenants with the Underwriters that the
Company will comply, in all material respects, with all applicable securities
and other applicable laws, rules and regulations in each foreign jurisdiction in
which the Directed Shares are offered in connection with the Directed Share
Program.
6. Conditions of the Obligations of the Underwriters. The obligations of
the several Underwriters to purchase and pay for the Firm Securities on the
First Closing Date and the Optional Securities to be purchased on each Optional
Closing Date will be subject to the accuracy of the representations and
warranties on the part of the Company herein, to the accuracy of the statements
of Company officers made pursuant to the provisions hereof, to the performance
by the Company of its obligations hereunder and to the following additional
conditions precedent:
14
(1) The Representative shall have received a letter, dated the date of
delivery thereof (which, if the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement, shall be on
or prior to the date of this Agreement or, if the Effective Time of the Initial
Registration Statement is subsequent to the execution and delivery of this
Agreement, shall be prior to the filing of the amendment or post-effective
amendment to the registration statement to be filed shortly prior to such
Effective Time), of PricewaterhouseCoopers LLP confirming that they are
independent public accountants within the meaning of the Act and the applicable
published Rules and Regulations thereunder and stating to the effect that:
(1) in their opinion the financial statements and schedules
examined by them and included in the Registration Statements comply as
to form in all material respects with the applicable accounting
requirements of the Act and the related published Rules and
Regulations;
(2) on the basis of a reading of the latest available interim
financial statements of the Company, inquiries of officials of the
Company who have responsibility for financial and accounting matters
and other specified procedures, nothing came to their attention that
caused them to believe that:
(1) at the date of the latest available balance sheet read
by such accountants, or at a subsequent specified date not more
than three business days prior to the date of this Agreement,
there was any change in the capital stock or any increase in
short-term indebtedness or long-term debt of the Company and its
consolidated subsidiaries or, at the date of the latest available
balance sheet read by such accountants, there was any decrease in
consolidated net assets, as compared with amounts shown on the
latest balance sheet included in the Prospectus; or
(2) for the period from the closing date of the latest
income statement included in the Prospectus to the closing date
of the latest available income statement read by such accountants
there were any decreases, as compared with the corresponding
period of the previous year, in consolidated net sales or net
operating income (loss) in the total or per share amounts of
consolidated income (loss) before extraordinary items or net
income (loss);
except in all cases set forth in clauses (A) and (B) above for
changes, increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter;
(3) on the basis of a reading of the unaudited pro forma
consolidated financial statements included in the Registration
Statements, carrying out certain specified procedures that would not
necessarily reveal matters of significance with respect to the
comments set forth in this paragraph (iii), inquiries of certain
officials of the Company and its consolidated subsidiaries who have
responsibility for financial and accounting matters and proving the
arithmetic accuracy of the application of the pro forma adjustments to
the historical amounts in the unaudited pro forma consolidated
financial statements, nothing came to their attention that caused them
to
15
believe that the unaudited pro forma consolidated financial statements
do not comply in form in all material respects with the applicable
accounting requirements of Rule 11-02 of Regulation S-X or that the
pro forma adjustments have not been properly applied to the historical
amounts in the compilation of such statements; and
(4) they have compared specified dollar amounts (or percentages
derived from such dollar amounts) and other financial information
contained in the Registration Statements (in each case to the extent
that such dollar amounts, percentages and other financial information
are derived from the general accounting records of the Company and its
subsidiaries subject to the internal controls of the Company's
accounting system or are derived directly from such records by
analysis or computation) with the results obtained from inquiries, a
reading of such general accounting records and other procedures
specified in such letter and have found such dollar amounts,
percentages and other financial information to be in agreement with
such results, except as otherwise specified in such letter.
For purposes of this subsection, (i) if the Effective Time of the Initial
Registration Statement is subsequent to the execution and delivery of this
Agreement, "REGISTRATION STATEMENTS" shall mean the initial registration
statement as proposed to be amended by the amendment or post-effective
amendment to be filed shortly prior to its Effective Time, (ii) if the
Effective Time of the Initial Registration Statement is prior to the
execution and delivery of this Agreement but the Effective Time of the
Additional Registration Statement is subsequent to such execution and
delivery, "REGISTRATION STATEMENTS" shall mean the Initial Registration
Statement and the additional registration statement as proposed to be filed
or as proposed to be amended by the post-effective amendment to be filed
shortly prior to its Effective Time, and (iii) "PROSPECTUS" shall mean the
prospectus included in the Registration Statements.
(2) If the Effective Time of the Initial Registration Statement is not
prior to the execution and delivery of this Agreement, such Effective Time shall
have occurred not later than 10:00 P.M., New York time, on the date of this
Agreement or such later date as shall have been consented to by CSFBC. If the
Effective Time of the Additional Registration Statement (if any) is not prior to
the execution and delivery of this Agreement, such Effective Time shall have
occurred not later than 10:00 P.M., New York time, on the date of this Agreement
or, if earlier, the time the Prospectus is printed and distributed to any
Underwriter, or shall have occurred at such later date as shall have been
consented to by CSFBC. If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement, the
Prospectus shall have been filed with the Commission in accordance with the
Rules and Regulations and Section 5(a) of this Agreement. Prior to such Closing
Date, no stop order suspending the effectiveness of a Registration Statement
shall have been issued and no proceedings for that purpose shall have been
instituted or, to the knowledge of the Company or the Representative, shall be
contemplated by the Commission.
(3) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred (i) any change, or any development or event involving a
prospective change, in the
16
condition (financial or other), business, properties or results of operations of
the Company and its subsidiaries taken as one enterprise which, in the judgment
of a majority in interest of the Underwriters including the Representative, is
material and adverse and makes it impractical or inadvisable to proceed with
completion of the public offering or the sale of and payment for the Offered
Securities; (ii) any downgrading in the rating of any debt securities of the
Company by any "nationally recognized statistical rating organization" (as
defined for purposes of Rule 436(g) under the Act), or any public announcement
that any such organization has under surveillance or review its rating of any
debt securities of the Company (other than an announcement with positive
implications of a possible upgrading, and no implication of a possible
downgrading, of such rating); (iii) any material suspension or material
limitation of trading in securities generally on the New York Stock Exchange,
The Nasdaq Stock Market's National Market, or any setting of minimum prices for
trading on such exchange, or any suspension of trading of any securities of the
Company on any exchange or in the over-the-counter market; (iv) any banking
moratorium declared by U.S. Federal, New York or California authorities; or (v)
any outbreak or escalation of major hostilities in which the United States is
involved, any declaration of war by Congress or any other substantial national
or international calamity or emergency if, in the judgment of a majority in
interest of the Underwriters including the Representative, the effect of any
such outbreak, escalation, declaration, calamity or emergency makes it
impractical or inadvisable to proceed with completion of the public offering or
the sale of and payment for the Offered Securities.
(4) The Representative shall have received an opinion, dated such
Closing Date, of Ropes & ▇▇▇▇, counsel for the Company, to the effect that:
(1) The Company has effected the Reclassification and has been duly
incorporated and is an existing corporation in good standing under the laws
of the State of Delaware, with corporate power and authority to own its
properties and conduct its business as described in the Prospectus; and the
Company is duly qualified to do business as a foreign corporation in good
standing in all other jurisdictions in which its ownership or lease of
property or the conduct of its business requires such qualification;
(2) Each of the Company's subsidiaries has been duly organized and is
validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation. Each of the Company's subsidiaries is duly
qualified and in good standing as a foreign corporation in each
jurisdiction in which the character or location of its properties (owned,
leased or licensed) or the nature or conduct of its business makes such
qualification necessary, except for those failures to be so qualified or in
good standing which will not in the aggregate have a material adverse
effect on the Company and its subsidiaries taken as a whole. Each of the
Company and its subsidiaries has all requisite corporate authority to own,
lease and license its properties and conduct its business as now being
conducted and as described in the Registration Statement and the
Prospectus;
17
(3) All of the outstanding shares of capital stock of each subsidiary
of the Company have been duly authorized and validly issued, are fully paid
and non-assessable and were not issued in violation of preemptive or
similar rights and are owned directly or indirectly by the Company, free
and clear of any lien, encumbrance, claim, security interest, restriction
on transfer, stockholders' agreement, voting trust or other defect of title
whatsoever;
(4) The Company has the authorized capitalization as set forth in the
Prospectus, and the Offered Securities delivered on such Closing Date and
all other outstanding shares of capital stock of the Company have been duly
authorized and validly issued, are fully paid and nonassessable and conform
to the description thereof contained in the Prospectus; and the
stockholders of the Company have no preemptive rights with respect to the
Securities;
(5) The Offered Securities have been approved for quotation on The
Nasdaq Stock Market's National Market;
(6) No consent, approval, authorization or order of, or filing with,
any governmental agency or body or any court is required to be obtained or
made by the Company for the consummation of the transactions contemplated
by this Agreement in connection with the sale of the Offered Securities or
for the consummation of the Purchase Agreement, except such as have been
obtained and made under the Act and such as may be required under state
securities laws;
(7) The Reclassification did not, and the execution, delivery and
performance of this Agreement and the consummation of the transactions
herein or therein contemplated (including, but not limited to the sale of
the Offered Securities by the Company and the use of the proceeds therefrom
as described in the Prospectus) and the consummation of the Acquisition
pursuant to the terms set forth in the Purchase Agreement (including but
not limited to the payment of the Acquisition Consideration) will not
result in a breach or violation of any of the terms and provisions of, or
constitute a default under, any statute, any rule, regulation or order of
any governmental agency or body or any court having jurisdiction over the
Company or any subsidiary of the Company or any of their properties, or any
agreement or instrument to which the Company or any such subsidiary is a
party or by which the Company or any such subsidiary is bound or to which
any of the properties of the Company or any such subsidiary is subject, or
the charter or by-laws of the Company or any such subsidiary;
(8) The Company is not and, after giving effect to the offering and
sale of the Offered Securities and the application of the proceeds thereof
and the Acquisition as described in the Prospectus, will not be an
"investment company" as defined in the Investment Company Act of 1940;
(9) Except as disclosed in or specifically contemplated by the
Registration Statement and the Prospectus, to such counsel's knowledge,
there are no outstanding options, warrants or other rights calling for the
issuance of, and no commitments, obligations, plans or arrangements to
issue, any shares of capital stock of the Company or any security
convertible
18
into or exchangeable for capital stock of the Company. The outstanding
stock options relating to the Securities have been duly authorized and
validly issued and conform to the descriptions thereof contained in the
Registration Statement and the Prospectus;
(10) Except as described in the Prospectus, no holder of any security
of the Company has the right to require registration of capital stock of
the Company in connection with the registration of the Offered Securities.
All such rights with respect to the Registration Statement have been
effectively waived. Further, no holders of any security of the Company have
the right to require the Company to register capital stock of the Company
for 180 days after the date of the Prospectus;
(11) The Initial Registration Statement was declared effective under
the Act as of the date and time specified in such opinion, the Additional
Registration Statement (if any) was filed and became effective under the
Act as of the date and time (if determinable) specified in such opinion,
the Prospectus either was filed with the Commission pursuant to the
subparagraph of Rule 424(b) specified in such opinion on the date specified
therein or was included in the Initial Registration Statement or the
Additional Registration Statement (as the case may be), and, to the best of
the knowledge of such counsel, no stop order suspending the effectiveness
of a Registration Statement or any part thereof has been issued and no
proceedings for that purpose have been instituted or are pending or
contemplated under the Act, and each Registration Statement and the
Prospectus, and each amendment or supplement thereto, as of their
respective effective or issue dates, complied as to form in all material
respects with the requirements of the Act and the Rules and Regulations;
such counsel have no reason to believe that any part of a Registration
Statement or any amendment thereto, as of its effective date or as of such
Closing Date, contained any untrue statement of a material fact or omitted
to state any material fact required to be stated therein or necessary to
make the statements therein not misleading; or that the Prospectus or any
amendment or supplement thereto, as of its issue date or as of such Closing
Date, contained any untrue statement of a material fact or omitted to state
any material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; the
descriptions in the Registration Statements and Prospectus of statutes,
legal and governmental proceedings and contracts and other documents are
accurate and fairly present the information required to be shown; and such
counsel do not know of any legal or governmental proceedings required to be
described in the Registration Statements or the Prospectus which are not
described as required or of any contracts or documents of a character
required to be described in the Registration Statements or the Prospectus
or to be filed as exhibits to the Registration Statements which are not
described and filed as required; it being understood that such counsel need
express no opinion as to the financial statements or other financial data
contained in the Registration Statements or the Prospectus; and
(12) Each of this Agreement, and to the extent governed by California
or Delaware law, the Purchase Agreement, has been duly authorized, executed
and delivered by the Company.
19
(a) The Representative shall have received an opinion, dated the
Closing Date, of ▇▇▇▇▇▇▇▇▇ & May, English counsel for the Company to the
effect that (i) the Purchase Agreement has been duly authorized (to the
extent governed by English law), executed and delivered by the parties
thereto and constitutes a valid and legally binding instrument, enforceable
in accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability relating
to or affecting creditors' rights and to general equity principles, (ii)
MCM has been duly organized and is validly existing as a corporation in
good standing under the laws of its jurisdiction of incorporation and has
all requisite corporate authority to own, lease and license its properties
and conduct its business as now being conducted and as described in the
Registration Statement and Prospectus, (iii) all of the shares of
outstanding capital stock of MCM have been duly authorized and validly
issued, are fully paid and non-assessable and were not issued in violation
of preemptive or similar rights and upon completion of the Acquisition
pursuant to the terms of the Purchase Agreement, will be owned by the
Company, free and clear of any lien, encumbrance, claim, security interest,
restriction on transfer, stockholders' agreement, voting trust or other
defect of title whatsoever, and (iv) no consent, approval, authorization or
order of, or filing with, any governmental agency or body or any court is
required to be obtained or made by the parties for the consummation of the
transactions contemplated by the Purchase Agreement, except such as have
been obtained.
(5) The Representative shall have received a letter, dated the date of
delivery thereof (which, if the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement, shall be on
or prior to the date of this Agreement or, if the Effective Time of the Initial
Registration Statement is subsequent to the execution and delivery of this
Agreement, shall be prior to the filing of the amendment or post-effective
amendment to the registration statement to be filed shortly prior to such
Effective Time), of KPMG Audit Plc confirming that they are independent public
accountants within the meaning of the Act and the applicable published Rules and
Regulations thereunder with respect to MCM (and its predecessor ▇▇▇▇▇▇▇ Limited)
and such other matters as shall be reasonably requested by the Underwriters and
agreed to by KPMG Audit Plc.
(6) The Representative shall have received from Skadden, Arps, Slate,
▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the Underwriters, such opinion or opinions,
dated such Closing Date, with respect to the incorporation of the Company, the
validity of the Offered Securities delivered on such Closing Date, the
Registration Statements, the Prospectus and other related matters as the
Representative may require, and the Company shall have furnished to such counsel
such documents as they request for the purpose of enabling them to pass upon
such matters.
(7) The Representative shall have received a certificate, dated such
Closing Date, of the President or the Chairman and a principal financial or
accounting officer of the Company in which such officers, to the best of their
knowledge after reasonable investigation, shall state that: the representations
and warranties of the Company in this Agreement are true and correct; the
Company has complied with all agreements and satisfied all conditions on its
part to be performed or satisfied hereunder at or prior to such Closing Date; no
stop order suspending the
20
effectiveness of any Registration Statement has been issued and no proceedings
for that purpose have been instituted or are contemplated by the Commission; the
Additional Registration Statement (if any) satisfying the requirements of
subparagraphs (1) and (3) of Rule 462(b) was filed pursuant to Rule 462(b),
including payment of the applicable filing fee in accordance with Rule 111(a) or
(b) under the Act, prior to the time the Prospectus was printed and distributed
to any Underwriter; and, subsequent to the date of the most recent financial
statements in the Prospectus, there has been no material adverse change, nor any
development or event involving a prospective material adverse change, in the
condition (financial or other), business, properties or results of operations of
the Company and its subsidiaries, taken as a whole except as set forth in or
contemplated by the Prospectus or as described in such certificate.
(8) The Representative shall have received a letter, dated such
Closing Date, of PricewaterhouseCoopers LLP which meets the requirements of
subsection (a) of this Section, except that the specified date referred to in
such subsection will be a date not more than three days prior to such Closing
Date for the purposes of this subsection.
(9) On or prior to the date of this Agreement, the Representative
shall have received lockup letters from each of the executive officers and
directors of the Company and the Company's stockholders.
(b) Prior to the Closing Date, the Reclassification shall have been
completed as described in the Prospectus under the caption "The
Reclassification."
(10) Prior to the Closing Date, the Company shall have entered into an
amendment to its Credit Agreement, as Amended and Restated as of August 28, 1998
relating to the use of proceeds from the offering of the Securities and the
consummation of the Acquisition pursuant to the terms of the Purchase Agreement,
and such amendment remains in full force and effect.
(11) The Company shall have entered into the Purchase Agreement and
the Representative shall have received counterparts, conformed as executed
thereof and of all other documents and agreements entered into in connection
therewith.
CSFBC may in its sole discretion waive on behalf of the Underwriters compliance
with any conditions to the obligations of the Underwriters hereunder, whether in
respect of an Optional Closing Date or otherwise.
1. Indemnification and Contribution. (a) The Company will indemnify and
hold harmless each Underwriter, its partners, directors and officers and each
person, if any, who controls such Underwriter within the meaning of Section 15
of the Act, against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material
21
fact contained in any Registration Statement, the Prospectus, or any amendment
or supplement thereto, or any related preliminary prospectus, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse each Underwriter for any legal or other expenses
reasonably incurred by such Underwriter in connection with investigating or
defending any such loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that the Company will not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement in or omission
or alleged omission from any of such documents in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
through the Representative specifically for use therein, it being understood and
agreed that the only such information furnished by any Underwriter consists of
the information described as such in subsection (b) below; and provided,
further, that with respect to any untrue statement or alleged untrue statement
in or omission or alleged omission from any preliminary prospectus the indemnity
agreement contained in this subsection (a) shall not inure to the benefit of any
Underwriter from whom the person asserting any such losses, claims, damages or
liabilities purchased the Offered Securities concerned, to the extent that a
prospectus relating to such Offered Securities was required to be delivered by
such Underwriter under the Act in connection with such purchase and any such
loss, claim, damage or liability of such Underwriter results from the fact that
there was not sent or given to such person, at or prior to the written
confirmation of the sale of such Offered Securities to such person, a copy of
the Prospectus, if the Company had previously furnished copies thereof to such
Underwriter.
The Company agrees to indemnify and hold harmless the Designated
Underwriter and each person, if any, who controls the Designated Underwriter
within the meaning of either Section 15 of the Act or Section 20 of the Exchange
Act (the "DESIGNATED Entities"), from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or investigating any
such action or claim) (i) caused by any untrue statement or alleged untrue
statement of a material fact contained in any material prepared by or with the
consent of the Company for distribution to Participants in connection with the
Directed Share Program or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading; (ii) caused by the failure of any Participant
to pay for and accept delivery of Directed Shares that the Participant agreed to
purchase; or (iii) related to, arising out of, or in connection with the
Directed Share Program, other than losses, claims, damages or liabilities (or
expenses relating thereto) that are finally judicially determined to have
resulted from the bad faith or gross negligence of the Designated Entities.
Insofar as the foregoing indemnity agreement, or the representations and
warranties contained in Section 2(ii), may permit indemnification for
liabilities under the Act of any person who is an Underwriter or a partner or
controlling person of an Underwriter within the meaning of Section 15 of the Act
and who, at the date of this Agreement, is a director, officer or controlling
person of the Company, the Company has been advised that in the opinion of the
Commission
22
such provisions may contravene Federal public policy as expressed in the Act and
may therefore be unenforceable. In the event that a claim for indemnification
under such agreement or such representations and warranties for any such
liabilities (except insofar as such agreement provides for the payment by the
Company of expenses incurred or paid by a director, officer or controlling
person in the successful defense of any action, suit or proceeding) is asserted
by such a person, the Company will submit to a court of appropriate jurisdiction
(unless in the opinion of counsel for the Company the matter has already been
settled by controlling precedent) the question of whether or not indemnification
by it for such liabilities is against public policy as expressed in the Act and
therefore unenforceable, and the Company will be governed by the final
adjudication of such issue.
(12) Each Underwriter will severally and not jointly indemnify and
hold harmless the Company, its directors and officers and each person, if any,
who controls the Company within the meaning of Section 15 of the Act against any
losses, claims, damages or liabilities to which the Company may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus, or arise out of or are based
upon the omission or the 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 reliance upon and in conformity with written information furnished to the
Company by such Underwriter through the Representative specifically for use
therein, and will reimburse any legal or other expenses reasonably incurred by
the Company in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred, it being understood
and agreed that the only such information furnished by any Underwriter consists
of (i) the concession and reallowance figures appearing in the fourth paragraph
under the caption "Underwriting" in the Prospectus, (ii) the information
contained in the sixth paragraph under the caption "Underwriting" in the
Prospectus relating to discretionary sales, (iii) the statements of Chase
Securities Inc. and FleetBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc. relating to their
participation in the Offering in the sixth to last paragraph under the caption
"Underwriting" in the Prospectus, and (iv) the information contained in the last
four paragraphs under the caption "Underwriting" in the Prospectus.
(13) Promptly after receipt by an indemnified party under this Section
or Section 9 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against an indemnifying party
under subsection (a) or (b) above or Section 9, notify the indemnifying party of
the commencement thereof; but the omission so to notify the indemnifying party
will not relieve it from any liability which it may have to any indemnified
party otherwise than under subsection (a) or (b) above or Section 9. In case any
such action is brought against any indemnified party and it notifies an
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense
23
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party), and after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party will
not be liable to such indemnified party under this Section or Section 9, as the
case may be, for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation. Notwithstanding anything contained herein to the
contrary, if indemnity may be sought pursuant to the second paragraph in Section
7(a) hereof in respect of such action or proceeding, then in addition to such
separate firm for the indemnified parties, the indemnifying party shall be
liable for the reasonable fees and expenses of not more than one separate firm
(in addition to any local counsel) for the Designated Underwriter for the
defense of any losses, claims, damages and liabilities arising out of the
Directed Share Program, and all persons, if any, who control the Designated
Underwriter within the meaning of either Section 15 of the Act or Section 20 of
the Exchange Act. No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement of any pending or threatened
action in respect of which any indemnified party is or could have been a party
and indemnity could have been sought hereunder by such indemnified party unless
such (i) settlement includes an unconditional release of such indemnified party
from all liability on any claims that are the subject matter of such action and
(ii) does not include a statement as to, or an admission of, fault, culpability
or a failure to act by or on behalf of an indemnified party.
(14) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Company on the one hand and the Underwriters on the other from the offering
of the Securities or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting expenses) received
by the Company bear to the total underwriting discounts and commissions received
by the Underwriters. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The amount paid by an indemnified
party as a result of the losses, claims, damages or liabilities referred to in
the first sentence of this subsection (d) shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any action or claim which is the subject of this
24
subsection (d). Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations in
this subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(15) The obligations of the Company under this Section or Section 9
shall be in addition to any liability which the Company may otherwise have and
shall extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter or the QIU (as defined herein) within the meaning of
the Act; and the obligations of the Underwriters under this Section shall be in
addition to any liability which the respective Underwriters may otherwise have
and shall extend, upon the same terms and conditions, to each director of the
Company, to each officer of the Company who has signed a Registration Statement
and to each person, if any, who controls the Company within the meaning of the
Act.
2. Default of Underwriters. If any Underwriter or Underwriters default in
their obligations to purchase Offered Securities hereunder on either the First
or any Optional Closing Date and the aggregate number of shares of Offered
Securities that such defaulting Underwriter or Underwriters agreed but failed to
purchase does not exceed 10% of the total number of shares of Offered Securities
that the Underwriters are obligated to purchase on such Closing Date, CSFBC may
make arrangements satisfactory to the Company for the purchase of such Offered
Securities by other persons, including any of the Underwriters, but if no such
arrangements are made by such Closing Date, the non-defaulting Underwriters
shall be obligated severally, in proportion to their respective commitments
hereunder, to purchase the Offered Securities that such defaulting Underwriters
agreed but failed to purchase on such Closing Date. If any Underwriter or
Underwriters so default and the aggregate number of shares of Offered Securities
with respect to which such default or defaults occur exceeds 10% of the total
number of shares of Offered Securities that the Underwriters are obligated to
purchase on such Closing Date and arrangements satisfactory to CSFBC and the
Company for the purchase of such Offered Securities by other persons are not
made within 36 hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Underwriter or the Company, except
as provided in Section 10 (provided that if such default occurs with respect to
Optional Securities after the First Closing Date, this Agreement will not
terminate as to the Firm Securities or any Optional Securities purchased prior
to such termination). As used in this Agreement, the term "Underwriter" includes
any person substituted for an Underwriter under this Section. Nothing herein
will relieve a defaulting Underwriter from liability for its default.
3. Qualified Independent Underwriter. The Company hereby confirms that at
its request CSFBC has without compensation acted as "qualified independent
underwriter" (in such
25
capacity, the "QIU") within the meaning of Rule 2710 of the Conduct Rules of the
National Association of Securities Dealers, Inc. in connection with the offering
of the Offered Securities. The Company will indemnify and hold harmless the QIU
against any losses, claims, damages or liabilities, joint or several, to which
the QIU may become subject, under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon the QIU's acting (or alleged failing to act) as such "qualified
independent underwriter" and will reimburse the QIU for any legal or other
expenses reasonably incurred by the QIU in connection with investigating or
defending any such loss, claim, damage, liability or action as such expenses are
incurred.
4. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Company or its officers and of the several Underwriters set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation, or statement as to the results thereof, made by or on behalf
of any Underwriter, the Company or any of their respective representatives,
officers or directors or any controlling person, and will survive delivery of
and payment for the Offered Securities. If this Agreement is terminated pursuant
to Section 8 or if for any reason the purchase of the Offered Securities by the
Underwriters is not consummated, the Company shall remain responsible for the
expenses to be paid or reimbursed by them pursuant to Section 5 and the
respective obligations of the Company and the Underwriters pursuant to Section 7
and the obligations of the Company pursuant to Section 9 shall remain in effect,
and if any Offered Securities have been purchased hereunder the representations
and warranties in Section 2 and all obligations under Section 5 shall also
remain in effect. If the purchase of the Offered Securities by the Underwriters
is not consummated for any reason other than solely because of the termination
of this Agreement pursuant to Section 8 or other than solely because of the
occurrence of any event specified in clause (iii), (iv) or (v) of Section 6(c),
the Company will reimburse the Underwriters for all out-of-pocket expenses
(including fees and disbursements of counsel) reasonably incurred by them in
connection with the offering of the Offered Securities.
5. Notices. All communications hereunder will be in writing and, if sent to
the Underwriters, will be mailed, delivered or telegraphed and confirmed to the
Representative at Eleven Madison Avenue, New York, N.Y. 10010-3629, Attention:
Investment Banking Department - Transactions Advisory Group, or, if sent to the
Company, will be mailed, delivered or telegraphed and confirmed to it at ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Chief Executive Officer;
provided, however, that any notice to an Underwriter pursuant to Section 7 will
be mailed, delivered or telegraphed and confirmed to such Underwriter.
6. Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective personal representatives and
successors and the officers and directors and controlling persons referred to in
Section 7, and no other person will have any right or obligation hereunder.
26
7. Representation. The Representative will act for the several Underwriters
in connection with the transactions contemplated by this Agreement, and any
action under this Agreement taken by the Representative will be binding upon all
the Underwriters.
8. Counterparts. This Agreement may be executed 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 Agreement.
9. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAWS.
The Company hereby submits to the non-exclusive jurisdiction of the Federal
and state courts in the Borough of Manhattan in The City of New York in any suit
or proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby.
27
If the foregoing is in accordance with the Representative's understanding
of our agreement, kindly sign and return to the Company one of the counterparts
hereof, whereupon it will become a binding agreement between the Company and the
several Underwriters in accordance with its terms.
Very truly yours,
..............................................
DDI CORP.
By...................................
[Insert title]
[DDI MERGER CO.]
By...................................
[Insert title]
The foregoing Underwriting Agreement is
hereby confirmed and accepted as of the
date first above written.
CREDIT SUISSE FIRST BOSTON CORPORATION
By.....................................
[Insert title]
Acting on behalf of itself
and as the Representative of
the several Underwriters.
28
SCHEDULE A
NUMBER OF
FIRM SECURITIES
UNDERWRITER TO BE PURCHASED
----------- ---------------
Credit Suisse First Boston Corporation.................
FleetBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.....................
Chase Securities Inc...................................
▇▇▇▇▇▇ Brothers Inc....................................
---------------
Total....................................
===============
29
