EXHIBIT 1.1
POWER-ONE, INC.
5,000,000 SHARES (*)
COMMON STOCK
($0.001 PAR VALUE)
UNDERWRITING AGREEMENT
______________, 1997
▇▇▇▇▇▇▇▇ INC., ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & COMPANY LLC
AND ▇▇▇▇▇▇▇▇▇▇ SECURITIES
As Representatives of the several
Underwriters named in Schedule I hereto.
c/o Stephens Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Gentlemen:
Power-One, Inc., a Delaware corporation (the "Company"), confirms its
agreement with the several underwriters (the "Underwriters") for whom you are
acting as representatives (the "Representatives") for the Company to issue and
sell 5,000,000 shares of the Company's common stock, par value $0.001 per share
(the "Underwritten Shares") to the Underwriters. The Company's common stock is
more fully described in the Registration Statement and the Prospectus
hereinafter mentioned.
For the sole purpose of covering over-allotments in connection with the
sale of the Underwritten Shares, the Company shall grant to the Underwriters the
option (the "Option") described in Section 2 hereof to purchase all or any part
of an additional 750,000 shares of the Company's common stock (the "Option
Shares"). The Underwritten Shares and the Option Shares purchased pursuant to
this Underwriting Agreement (this "Agreement") are herein called the "Shares"
and the proposed offering of the Shares by the Underwriters is hereinafter
referred to as the "Public Offering."
The Company has filed with the Securities and Exchange Commission (the
"Commission"), pursuant to the Securities Act of 1933, as amended (the "Act"),
and published rules and regulations adopted by the Commission under the Act (the
"Rules"), a registration statement on Form S-1 ("Form S-1") (File No.
333-32889), including a Preliminary Prospectus, relating to the Shares, and such
amendments to such registration statement as may have been filed with the
Commission to the date of this Agreement. The Company will also file with the
Commission one of the following: (A) prior to effectiveness of such registration
statement, a further amendment to such registration statement, including the
form of final prospectus, and/or (B) after effectiveness of such registration
statement, a final prospectus in accordance with Rules 430A and 424(b). The
Company has furnished to the Representatives copies of such registration
________________
(*) Plus up to 750,000 additional shares of common stock to cover
over-allotments.
statement, each amendment to it filed by the Company with the Commission, and
each Preliminary Prospectus filed by the Company with the Commission. The
registration statement as amended at the time it becomes or became effective
(the "Effective Date"), including financial statements and all exhibits and any
information deemed to be included by Rule 430A, is called the "Registration
Statement." The term "Preliminary Prospectus" means any Preliminary Prospectus
(as referred to in Rule 430 or Rule 430A of the Rules) included at any time as a
part of the registration statement and the term "Prospectus" means the
prospectus relating to the Shares that is first filed pursuant to Rule 424(b)
after the date hereof.
Any reference herein to the Registration Statement, any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include any
documents incorporated by reference therein on or before the Effective Date or
the date of such Preliminary Prospectus or the Prospectus, as the case may be.
As the Representatives, you have advised the Company that (a) you are
authorized to enter into this Agreement on behalf of the several Underwriters
and (b) the Underwriters are willing, acting severally and not jointly, to
purchase the amounts of the Underwritten Shares set forth opposite their
respective names in Schedule I hereto, plus their pro rata portion of the Option
Shares if you elect to exercise the over-allotment Option in whole or in part
for the accounts of the several Underwriters.
In consideration of the mutual agreements contained herein and of the
interests of the parties in the transactions contemplated hereby, the Company
and the Underwriters hereby agree as follows:
1. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY
(a) The Company represents and warrants to, and agrees with, each
Underwriter as follows:
(i) The Company has been duly organized, is in compliance with its
Certificate of Incorporation, 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 its properties and conduct its
business as described in the Prospectus. Each significant subsidiary (as
defined by the Act) of the Company (each a "Subsidiary" and collectively,
the "Subsidiaries") has been duly incorporated and is validly existing as a
corporation, in good standing under the laws of the jurisdiction of its
organization, with full power and authority (corporate and other) to own or
lease its properties, and conduct its business. The Company and the
Subsidiaries are duly qualified to transact business in all jurisdictions
in which the conduct of its business or the ownership or lease of its
properties requires such qualifications except where the failure to be so
qualified would not reasonably be expected to have a Material Adverse
Effect (as defined below). The Company owns all of the outstanding capital
stock of its Subsidiaries free and clear of any pledge, lien, security
interest, encumbrance, claim or equitable interest.
(ii) The outstanding shares of common stock of the Company have
been duly and validly authorized and issued and are fully paid and
non-assessable; the Shares are duly and validly authorized, and, if not
now issued, when issued and paid for as contemplated herein, will be
fully paid and non-assessable. As of the Closing Date, there will be no
preemptive or other similar rights to subscribe for or to purchase, or
any restriction upon the voting or transfer of the Shares pursuant to
the Company's Certificate of Incorporation, bylaws, or other governing
documents or any agreement or other instrument to which the Company or
any of its Subsidiaries is a party or by which any of them may be bound.
Neither the filing of the Registration Statement nor the offering
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of the Shares as contemplated by this Agreement gives rise to any
rights, other than those which have been waived or satisfied, for or
relating to the registration of any shares of any class of the Company's
capital stock. The Shares have been approved for listing on The Nasdaq
National Market, subject to official notice of issuance.
(iii) The Shares conform in all material respects with the
statements concerning them in the Prospectus. As of the Closing Date (as
defined below) and any Option Closing Date (as defined below), if
applicable, the Company will have the authorized capital stock set forth
under the caption "Description of Capital Stock" in the Prospectus. No
further corporate approval or authority on behalf of the Company will be
required for the issuance and sale of the Shares to be sold by the Company
as contemplated herein.
(iv) Any Preliminary Prospectus, the Prospectus and the Registration
Statement comply as to form with the requirements of the Act and the Rules,
including Form S-1.
(v) Neither the Commission nor any other agency, body, authority,
court or arbitrator of competent jurisdiction has, by order or otherwise,
prohibited or suspended the use of any Preliminary Prospectus or the
Prospectus relating to the proposed offering of the Shares or, to the
Company's knowledge, instituted proceedings for that purpose. The
Registration Statement, the Prospectus and any Preliminary Prospectus and
any amendments or supplements thereto at the time they became or become
effective or were filed or are filed with the Commission contained or will
contain all statements which are required to be stated therein by, and in
all material respects conformed or will conform to the requirements of, the
Act and the Rules. Neither the Registration Statement nor any Preliminary
Prospectus nor any amendment thereto, and neither the Prospectus nor any
supplement thereto, as of its date and while effective, 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,
in light of the circumstances under which they were made, not misleading;
PROVIDED, HOWEVER, that the Company does not make any representations or
warranties as to information contained in or omitted from the Registration
Statement or any Preliminary Prospectus or the Prospectus, or any such
amendment or supplement, in reliance upon, and in conformity with, written
information furnished to the Company by or on behalf of any Underwriter
through the Representatives, expressly for use in the preparation thereof
as hereinafter set forth in Section 15.
(vi) The consolidated financial statements of the Company and the
Subsidiaries, together with related notes and schedules as set forth in the
Registration Statement, present fairly the consolidated financial condition
and the results of operations of the Company and the Subsidiaries, at the
indicated dates and for the indicated periods. Such financial statements
have been prepared in accordance with generally accepted accounting
principles ("GAAP"), consistently applied throughout the periods involved,
and all adjustments necessary for a fair presentation of results for such
periods have been made. The summary financial information and the selected
financial data included in the Prospectus present fairly in accordance with
GAAP (other than the "EBITDA" information) the information shown therein
and have been compiled on a basis consistent with that of the audited and
unaudited financial statements from which they were derived.
(vii) Except as is disclosed in the Prospectus, there is no action
or proceeding pending or, to the knowledge of the Company, threatened
against the Company, any of its Subsidiaries or any of their respective
officers or any of their properties, assets or rights before any court or
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administrative or governmental agency or other body which reasonably would
be expected to (A) result in any material adverse change in the financial
condition, or in the earnings, business, affairs, properties, business
prospects or results of operations of the Company and its Subsidiaries
taken as a whole ("Material Adverse Change" or "Material Adverse Effect,"
as the case may be), whether or not arising in the ordinary course of
business, (B) adversely affect the performance of this Agreement or the
consummation of the transactions herein contemplated, except as disclosed
in the Prospectus and for which the Company maintains a reserve in an
amount which it believes is adequate to cover potential liabilities, or (C)
be required to be disclosed in the Registration Statement.
(viii) The Company and each of its Subsidiaries are not in
violation of any law, ordinance, governmental rule or regulation or court
decree to which they may be subject which violation reasonably would be
expected to have a Material Adverse Effect.
(ix) The Company and its Subsidiaries have good and marketable title
to all of the real properties and valid title to all other assets reflected
in the consolidated financial statements hereinabove described or as
described in the Prospectus as being owned by them, subject to no lien,
mortgage, pledge, charge or encumbrance of any kind except those securing
indebtedness described in such financial statements or as described in the
Prospectus or which do not materially affect the present or proposed use of
such properties or assets or would not cause a Material Adverse Effect.
The Company and its Subsidiaries occupy their leased properties under
valid, subsisting and binding leases with only such exceptions as in the
aggregate are not material and do not interfere with the conduct of the
business of the Company and its Subsidiaries. There exists no default
under the provisions of any lease, contract or other obligation to which
the Company is a party which may result in a Material Adverse Change.
(x) The Company and its Subsidiaries have filed all federal, state
and other tax returns and reports which have been required to be filed and
have paid all taxes indicated by said returns and all assessments received
by them to the extent that such taxes have become due and there is no tax
deficiency that has been or, to the Company's knowledge, might be asserted
against the Company or any of its Subsidiaries that might have a Material
Adverse Effect. All material tax liabilities are adequately provided for
on the books of the Company and its Subsidiaries.
(xi) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, as they may be amended or
supplemented, (A) there has not been any Material Adverse Change nor, to
the knowledge of the Company, is any such change threatened, (B) there has
not been any transaction entered into by the Company or its Subsidiaries
that is material to the earnings, business, affairs, properties, business
prospects or operations of the Company and its Subsidiaries taken as a
whole, other than transactions in the ordinary course of business and
changes and transactions contemplated by the Registration Statement and the
Prospectus, as they may be amended or supplemented, (C) other than changes
in the amounts outstanding under the Company's and its Subsidiaries'
revolving credit facilities, there has not been any material change in the
capital stock, long term debt or material liabilities of the Company or its
Subsidiaries, and (D) there has not been any dividend or distribution of
any kind declared, paid or made on the capital stock of the Company or any
of its Subsidiaries. Neither the Company nor any Subsidiary has any
contingent obligations or liabilities which are required to be but are not
disclosed in the Registration Statement and the Prospectus.
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(xii) The filing of the Registration Statement and related
Prospectus and the execution and delivery of this Agreement have been duly
authorized by the Board of Directors of the Company; this Agreement
constitutes a valid and legally binding obligation of the Company
enforceable in accordance with its terms except as enforceability may be
limited by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other laws affecting creditors' rights generally and by
general principles of equity and federal and state securities laws. The
Company is not in breach or violation of or default under any indenture,
mortgage, deed of trust, lease, contract, note or other agreement or
instrument to which it is a party or by which it or any of its properties
is bound and which breach, violation or default would reasonably be
expected to have a Material Adverse Effect. The consummation of the
transactions herein contemplated and the fulfillment of the terms hereof
will not result in a breach or violation of any of the material terms and
provisions of, or constitute a default under, any indenture, mortgage, deed
of trust, lease, contract, note or other agreement or instrument to which
the Company or any Subsidiary is a party, or of the Company's or any
Subsidiary's Certificate of Incorporation or bylaws or any law, decree,
order, rule, writ, injunction or regulation applicable to the Company or
any Subsidiary of a court or of any regulatory body or administrative
agency or other governmental body having jurisdiction over the Company and
its Subsidiaries except for such breaches, violations or defaults as would
not reasonably be expected to have a Material Adverse Effect.
(xiii) Each approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body necessary in connection with the execution and delivery
by the Company of this Agreement and performance of its obligations
hereunder (except such additional steps as may be necessary to qualify the
Shares for public offering by the Underwriters under state securities or
Blue Sky laws, and filing the Prospectus under Rule 424(b)) has been
obtained or made and is in full force and effect.
(xiv) The Company and each Subsidiary hold all material licenses,
authorizations, charters, certificates and permits from governmental
authorities which are necessary to the conduct of their businesses and
neither the Company nor any Subsidiary has received notice of any
proceeding relating to the revocation or modification of any of such
licenses, authorizations, charters, certificates or permits. The Company
and its Subsidiaries own or otherwise possess rights to the patents, patent
rights, licenses, inventions, copyrights, trademarks, service marks and
trade names presently employed by them in connection with the businesses
now operated by them as described in the Prospectus, and neither the
Company nor any of its Subsidiaries has infringed or received any notice of
infringements of or conflict with asserted rights of others with respect to
any of the foregoing, except where such infringement or conflict would not
reasonably be expected to result in a Material Adverse Effect.
(xv) Deloitte & Touche LLP, independent auditors, who have certified
certain of the financial statements filed with the Commission and included
as part of the Registration Statement and Prospectus, are independent
public accountants within the meaning of the Act, the Rules and Regulation
S-X of the Commission and Rule 101 of the Code of Professional Ethics of
the American Institute of Certified Public Accountants.
(xvi) There are no agreements, contracts or other documents of a
character required to be described in the Registration Statement or the
Prospectus or required by Form S-1 to be filed as
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exhibits to the Registration Statement or incorporated by reference
in the Registration Statement which are not described, filed or
incorporated as required.
(xvii) No labor dispute is pending or, to the knowledge of the
Company, threatened by the Company's or any Subsidiary's employees which
could result in a Material Adverse Effect. No collective bargaining
agreement exists with any of the Company's employees and, to the Company's
knowledge, no agreement is imminent.
(xviii) Except as contemplated by Section 2 hereof and as disclosed
in the Prospectus and permitted by the Rules, the Company has not (itself
or through any person) taken and will not take, directly or indirectly, any
action designed to or which might reasonably be expected to, cause or
result in a violation of Section 5 of the Act or Regulation M under the Act
or in stabilization or manipulation of the price of the Company's common
stock.
(xix) Without limiting the generality of any of the foregoing
representations and warranties and except to the extent no Material Adverse
Effect would reasonably be expected to occur, (a) none of the operations of
the Company or its Subsidiaries is in violation of any material
environmental law, regulation or any permit; (b) neither the Company nor
any of its Subsidiaries has been notified that it is under investigation or
under review by any governmental agency with respect to compliance
therewith or with respect to the generation, use, treatment, storage or
release of hazardous material; (c) neither the Company nor any of its
Subsidiaries have any material liability in connection with the past
generation, use, treatment, storage, disposal or release of any hazardous
material; (d) there is no hazardous material that may reasonably be
expected to pose any material risk to safety, health, or the environment,
on, under or about any property owned, leased or operated by the Company or
any of its Subsidiaries or, to the knowledge of the Company, any property
adjacent to any such property; and (e) there has heretofore been no release
of any hazardous material on, under or about such property, or, to the
knowledge of the Company, any such adjacent property. None of the present
or, to the knowledge of the Company, past property of the Company or any of
its Subsidiaries is listed or proposed for listing on the National
Priorities List pursuant to the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended ("CERCLA"), or on the
Comprehensive Environmental Response Compensation Liability Information
System List ("CERCLIS") or any similar state list of sites requiring
remedial action. Neither the Company nor any of its Subsidiaries is
subject to any Environmental Property Transfer Act, or to the extent that
any such statute is applicable to any property, the Company and its
Subsidiaries have fully complied with their obligations under such
statute(s), and neither has any outstanding obligations or liabilities
under any Environmental Property Transfer Act.
(xx) The Company and its Subsidiaries maintain insurance of the types
and in the amounts customary for their businesses, including, but not
limited to, insurance covering liability and real and personal property
owned or leased by the Company against theft, damage, destruction, acts of
vandalism and all other risks customarily insured against, all of which
insurance is in full force and effect.
(xxi) Neither the Company nor any Subsidiary has at any time
during the last five years (a) made any unlawful contribution to any
candidate for foreign office, or failed to disclose fully any contribution
in violation of law, or (b) made any payment to any federal or state
governmental
6
officer or official, or other person charged with similar public or
quasi-public duties, other than payments required or permitted by the
laws of the United States or any jurisdiction thereof.
(xxii) Each executive officer and director of the Company has
executed a lock-up agreement, a form of which is attached hereto as Exhibit
"A" (the "Lock-Up Agreement").
(b) Any certificate signed by any officer of the Company and delivered to
you or counsel for the Underwriters shall be deemed a representation and
warranty by the Company to the Underwriters as to the matters covered thereby.
2. PURCHASE, SALE AND DELIVERY OF THE UNDERWRITTEN SHARES. On the basis
of the representations, warranties and covenants herein contained, and subject
to the terms and conditions herein set forth, the Company agrees to sell each
Underwriter, severally and not jointly, and each Underwriter agrees, severally
and not jointly, to purchase, at a price of $_____ per share, the number of the
Underwritten Shares set forth on Schedule I attached hereto, subject to
adjustment in accordance with Section 12 hereof.
Payment for the Underwritten Shares shall be made by wire transfer of
immediately available U.S. Funds to a designated account of the Company, to the
order of the Company, against delivery of certificates for the Shares to the
Representatives for the accounts of the several Underwriters. Delivery of
certificates shall be to the Representatives c/o Stephens Inc. ("▇▇▇▇▇▇▇▇"), ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other address as Stephens
may designate in writing. Payment will be made at the offices of ▇▇▇▇▇▇▇▇, or
at such other place as shall be agreed upon by ▇▇▇▇▇▇▇▇ and the Company, at
approximately 9:00 a.m., central time, on _________________, 1997, such time and
date being herein referred to as the "Closing Date." The certificates for the
Underwritten Shares will be delivered in such denominations and in such
registrations as ▇▇▇▇▇▇▇▇ reasonably requests in writing and will be made
available for inspection at such locations as ▇▇▇▇▇▇▇▇ may reasonably request at
least one full business day prior to the Closing Date.
In addition, on the basis of the representations, warranties, agreements
and covenants herein contained and subject to the terms and conditions herein
set forth, the Company hereby grants the Option to the several Underwriters to
purchase the Option Shares at the price per share as set forth in the first
paragraph of this Section 2. The Option may be exercised in whole or in part on
one occasion upon written notice (or oral notice, subsequently confirmed in
writing) given not more than thirty (30) days following the date of this
Agreement, by ▇▇▇▇▇▇▇▇, on behalf of the Representatives of the several
Underwriters, to the Company setting forth the number of Option Shares as to
which the several Underwriters are exercising the Option and the names and
denominations in which the Option Shares are to be registered. Closing on the
purchase of the Option Shares (the "Option Closing Date"), if any, shall occur
no later than three (3) business days following the date upon which notice of
exercise of the Option is given to the Company, and shall take place at the
offices of ▇▇▇▇▇▇▇▇, or at such other place as shall be agreed upon by ▇▇▇▇▇▇▇▇
and the Company. Subject to Section 12, the number of Option Shares to be
purchased by each Underwriter shall be in the same proportion to the total
number of shares of the common stock being purchased by such Underwriter bears
to 5,000,000 shares, adjusted by you in such manner as to avoid fractional
shares. The Option may be exercised only to cover over-allotments in the sale
of the Underwritten Shares by the Underwriters. ▇▇▇▇▇▇▇▇, on behalf of the
Representatives of the several Underwriters, may cancel such option at any time
prior to its expiration by giving written notice (or oral notice, subsequently
confirmed in writing) of such cancellation to the Company. To the extent, if
any, that the Option is exercised, payment for the Option Shares shall be made
by wire transfer of immediately available U.S. Funds to a designated account of
the
7
Company, to the order of the Company. Certificates for the Option Shares
shall be delivered in the same manner and upon the same terms as the
Underwritten Shares.
3. QUALIFIED INDEPENDENT UNDERWRITER. The Company hereby confirms its
engagement of ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Company LLC, and ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ &
Company LLC hereby confirms its agreement with the Company to render services
as, a "qualified independent underwriter" within the meaning of Section 2(o) of
Rule 2720 of the National Association of Securities Dealers, Inc. (the "NASD")
with respect to the offering and sale of the Shares. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ &
Company LLC, in its capacity as qualified independent underwriter and not
otherwise, is referred to herein as the "QIU."
4. OFFERING BY THE UNDERWRITERS. It is understood that the Public
Offering of the Underwritten Shares is to be made as soon as the Representatives
deem it advisable to do so after the Registration Statement has become
effective. The Underwritten Shares are to be initially offered to the public at
the public offering price set forth in the Prospectus. The Representatives may
from time to time thereafter change the public offering price and other selling
terms. To the extent, if at all, that any Option Shares are purchased pursuant
to Section 2 hereof, the Underwriters will offer them to the public on the
foregoing terms.
It is further understood that you will act as the Representatives for the
Underwriters in the offering and sale of the Shares, in accordance with an
Agreement Among Underwriters which has been entered into by you and the several
other Underwriters.
5. COVENANTS OF THE COMPANY. The Company covenants and agrees with each
of the several Underwriters that:
(a) The Company will use its best efforts to cause the Registration
Statement to become effective and will not, either before or after
effectiveness, file any amendment thereto or supplement to the Prospectus
(including a prospectus filed pursuant to Rule 424(b) which differs from
the Prospectus on file at the time the Registration Statement becomes
effective) or file any documents under the Exchange Act before the earlier
to occur of (A) the 35th day following the Effective Date or (B) the
closing date of the Underwriters' purchase of the Option Shares if such
document would be deemed to be incorporated by reference into the
Registration Statement, the Preliminary Prospectus or the Prospectus of
which the Representatives shall not previously have been advised and
furnished with a copy or to which the Representatives shall have reasonably
objected in writing or which is not in compliance with the Act or Rules.
(b) The Company will advise the Representatives promptly of any
request of the Commission or other securities regulatory agency ("Other
Securities Regulator") for amendment of the Registration Statement or for
supplement to the Prospectus or for any additional information, or of the
issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or the use of the Prospectus or of the
institution of any proceedings for that purpose, or comparable action taken
or initiated by any Other Securities Regulator, and the Company will use
its reasonable efforts to prevent the issuance of any such stop order
preventing or suspending the use of the Prospectus and to obtain as soon as
possible the lifting thereof, if issued.
(c) The Company will use its reasonable efforts with the
Representatives in endeavoring to qualify the Shares for sale under the
securities laws of such jurisdictions (including foreign
8
jurisdictions) as the Representatives may reasonably designate, and will
make such applications, file such documents, and furnish such
information as may be reasonably required for that purpose; PROVIDED,
HOWEVER, the Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any
jurisdiction where it is not so qualified or required to file such a
consent. The Company will, from time to time, prepare and file such
statements, reports, and other documents, as are or may be required to
continue such qualifications in effect for so long a period as the
Representatives may reasonably request for distribution of the Shares.
(d) The Company will deliver to, or upon the order of, the
Representatives, from time to time, as many copies of any Preliminary
Prospectus or the Prospectus as the Representatives may reasonably request.
The Company will deliver to, or upon the order of, the Representatives, on
the Trade Date and thereafter from time to time during the period necessary
to effect the distribution of the Shares as many copies of the Prospectus
in final form, or as thereafter amended or supplemented, as the
Representatives may reasonably request. The Company will deliver to each
of the Representatives at or before the Closing Date, one (1) manually
signed copy of the Registration Statement and all amendments thereto
including all exhibits filed therewith (including any document filed under
the Exchange Act and deemed to be incorporated by reference into the
Registration Statement, the Preliminary Prospectus or the Prospectus) and
will deliver to the Representatives such number of copies of the
Registration Statement, but without exhibits, and of all amendments
thereto, as the Representatives may reasonably request.
(e) During the time necessary to effect the distribution of the
Shares, the Company shall comply with all requirements imposed upon it by
the Act, as now and hereafter amended, and by the Rules, as from time to
time in force, so far as is necessary to permit the continuance of sales of
or dealings in the Shares as contemplated by the provisions hereof and the
Prospectus. If, during the period necessary to effect the distribution of
the Shares, any event shall occur as a result of which, in the judgment of
the Company or in the opinion of counsel for the Underwriters, it becomes
necessary to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances existing at the time
the Prospectus is delivered to a purchaser, not misleading, or, if it is
necessary at any time to amend or supplement the Prospectus to comply with
any law or to file under the Exchange Act any document which would be
deemed to be incorporated by reference in the Prospectus in order to comply
with the Act or the Exchange Act, the Company promptly will notify the
Representatives and, subject to the Representatives' prior review, prepare
and file with the Commission and any appropriate Other Securities Regulator
an appropriate amendment or supplement to the Prospectus (at the expense of
the Company) so that the Prospectus as so amended or supplemented will not,
in light of the circumstances when it is so delivered, be misleading, or so
that the Prospectus will comply with the law.
(f) The Company will make generally available to its security holders
in the manner contemplated by Rule 158(b) under the Act, as soon as it is
practicable to do so, but in any event not later than the 90th day after
the end of the fiscal quarter first occurring one year after the Effective
Date, an earnings statement in reasonable detail, covering a period of at
least twelve consecutive months beginning after the Effective Date, which
earnings statement shall satisfy the requirements of Section 11(a) of the
Act and will advise you in writing when such statement has been so made
available.
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(g) For a period of three years from the date of this Agreement, the
Company will furnish to the Representatives (a) concurrently with
furnishing of such reports to its stockholders, statements of income of the
Company for each quarter in the form furnished to the Company's
stockholders and certified by the Company's principal financial or
accounting officer; (b) concurrently with furnishing to its stockholders, a
balance sheet of the Company as at the end of such fiscal year, together
with statements of earnings, stockholders' equity and cash flow of the
Company for such fiscal year, all in reasonable detail and accompanied by a
copy of the certificate or report thereon of independent public
accountants; (c) as soon as they are available, copies of all reports
(financial or other) mailed to stockholders; (d) as soon as they are
available, copies of all reports and financial statements furnished to or
filed with the Commission; (e) every press release which was released or
prepared by the Company; and (f) any additional information of a public
nature concerning the Company or its business which you may reasonably
request. During such period, if the Company shall have active subsidiaries
the foregoing financial statements shall be on a consolidated basis to the
extent that the accounts of the Company and its subsidiaries are
consolidated, and shall be accompanied by similar financial statements for
any significant subsidiary (as defined by the Act) which is not so
consolidated.
(h) Promptly after the Company is advised thereof, it will advise the
Representatives, and confirm in writing, that the Registration Statement
and any amendments shall have become effective.
(i) The Company will use the net proceeds from the sale of the Shares
substantially in the manner set forth in the Prospectus under the caption
"Use of Proceeds."
(j) Other than as permitted by the Act and the Rules, the Company
will not distribute any prospectus or offering materials in connection with
the offering and sale of the Shares and prior to the Closing Date or the
Option Closing Date will not issue any press releases or other
communications directly or indirectly and will hold no press conferences
with respect to the Company, the financial condition, results of
operations, business, properties, assets or liabilities of the Company, or
the offering of the Shares, without the prior written consent of ▇▇▇▇▇▇▇▇.
(k) The Company will maintain a transfer agent and, if necessary
under the jurisdiction of incorporation of the Company, a registrar for its
common stock and will use its best efforts to maintain the listing of the
Shares on The Nasdaq National Market.
(l) Except as contemplated hereby or by the Prospectus, the Company
will not, for a period of one hundred eighty (180) days after the Effective
Date of the Registration Statement, offer to sell, contract to sell, sell
or otherwise dispose of any shares of the Company's common stock or
securities convertible into shares of the Company's common stock without
the prior written consent of ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Company LLC, which
consent will not be unreasonably withheld.
The foregoing covenants and agreements shall apply to any successor of the
Company, including without limitation, any entity into which the Company might
consolidate or merge.
6. COSTS AND EXPENSES. Whether or not the Registration Statement becomes
effective, the Company will pay all costs, expenses and fees incident to the
performance of the obligations of the Company under this Agreement, including,
without limiting the generality of the foregoing, the following: accounting
10
fees of the Company; the fees and disbursements of counsel for the Company;
the cost of printing and delivering to Underwriters copies of the
Registration Statement, any Preliminary Prospectus, the Prospectus, this
Agreement, the Agreement Among Underwriters, the Selected Dealer Agreement,
Underwriters' Questionnaire and Power of Attorney, and the Blue Sky Survey
and any supplements thereto; the filing fees of the Commission; the filing
fees incident to securing any required review by the NASD of the terms of the
sale of the Shares on behalf of, and any disbursements made by, the
Representatives or ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Company LLC in its capacity as a
"qualified independent underwriter;" the cost of printing certificates
representing the Shares; and the cost and charges of any transfer agent or
registrar. Any transfer taxes imposed on the sale of the Shares to the
Underwriters will be paid by the Company. The Company shall not, however, be
required to pay for any of the Underwriters' expenses (other than those
related to qualification under State securities or Blue Sky laws) except
that, if the Public Offering shall not be consummated because the conditions
in Section 8 hereof are not satisfied, or because this Agreement is
terminated by the Representatives pursuant to Section 7 hereof, or by reason
of any failure, refusal or inability on the part of the Company to perform
any undertaking or satisfy any condition of this Agreement or to comply with
any of the terms hereof on their part to be performed, unless such failure to
satisfy said condition or to comply with said terms is due to the default or
omission of any Underwriter, then the Company shall reimburse the several
Underwriters for all costs and expenses, including attorney fees and
out-of-pocket expenses, reasonably incurred in connection with investigating,
marketing and proposing to market the Shares or in contemplation of
performing their obligations hereunder, but the Company shall not in any
event be liable to any of the several Underwriters for damages on account of
loss of anticipated profits from the sale by them of the Shares.
7. CONDITIONS OF OBLIGATIONS OF THE UNDERWRITERS. The obligations of the
several Underwriters to purchase and pay for the Shares as provided herein, are
subject to the accuracy, as of the Closing Date and as of the Option Closing
Date, of the representations and warranties and agreements of the Company
contained herein, to the performance by the Company of its obligations hereunder
and to the following additional conditions:
(a) The Registration Statement shall have become effective not later
than __:00 a.m., central time, on the date of this Agreement, unless a
later time and date is agreed to by the Representatives, and no stop order
or other order suspending the effectiveness thereof or the qualification of
the Shares under the State securities or Blue Sky laws of any jurisdiction
shall have been issued and no proceeding for that purpose shall have been
taken or, to the knowledge of the Company, shall be contemplated or
threatened by the Commission or any Other Securities Regulator. If the
Company has elected to rely upon Rule 430A of the Rules, the price of the
Shares and any price-related information previously omitted from the
effective Registration Statement pursuant to such Rule 430A shall have been
transmitted to the Commission for filing pursuant to Rule 424(b) of the Act
within the prescribed time period, and prior to the Closing Date the
Company shall have provided evidence satisfactory to the Representatives of
such timely filing, or a post-effective amendment providing such
information shall have been promptly filed and declared effective in
accordance with the requirements of Rule 430A under the Act. All requests
for additional information on the part of the Commission or any other
government or regulatory authority with jurisdiction (to be included in the
Registration Statement or Prospectus or otherwise) shall be complied with
to the satisfaction of the Commission or such authorities.
(b) The Representatives shall have received on the Closing Date and
on the Option Closing Date the opinion of O'Melveny & ▇▇▇▇▇ LLP, counsel
for the Company, with respect to the
11
Company, and an opinion of foreign counsel to the Company with respect
to the Subsidiaries, with respect to matters set forth below in
subparagraphs (i) through (ix) dated the Closing Date and the Option
Closing Date, addressed to the Underwriters in form and substance
satisfactory to ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel to the Underwriters,
to the effect that:
(i) The Company and the Subsidiaries have been duly organized
and are validly existing in good standing under the laws of the
state(s) or similar foreign jurisdictions (with respect to the
Subsidiaries) of their organization with corporate power to own their
properties and conduct their business as described in the Registration
Statement and Prospectus; the Company and the Subsidiaries are duly
qualified to transact business in those jurisdictions listed in such
counsel's opinion (which list shall include, with respect to the
Company, each state in which the Company owns properties as shown in
the Prospectus); and all of the outstanding shares of capital stock of
the Company have been duly authorized and, upon payment for and
delivery of the Shares and the countersigning of the certificates
representing the Shares by a duly signatory, the Shares will be duly
issued, fully paid and non-assessable, and except as set forth in the
Prospectus and the Registration Statement, no options, warrants or
other rights to purchase, agreements or other obligations to issue or
other rights to convert any obligations into any shares of capital
stock of the Company are outstanding.
(ii) The Company has authorized and, to the knowledge of such
counsel, outstanding the capital stock set forth under the caption
"Description of Capital Stock" in the Registration Statement and
Prospectus, except for issuances subsequent to the date of the
Prospectus, if any, pursuant to reservations, commitments, employee
benefit plans, the recapitalization contemplated by the Registration
Statement or other existing agreements; all of the Shares conform to
the description thereof contained in the Prospectus; the certificates
for the Shares are in due and proper form, the Underwritten Shares to
be sold pursuant to this Agreement have been duly authorized and, upon
payment for and delivery of the Shares and the countersigning of the
certificates representing the Shares by a duly signatory, the Shares
will be validly issued, fully paid and non-assessable when issued and
paid for as contemplated by this Agreement; there are no preemptive or
other restrictive rights to subscribe for or to purchase or any
restriction upon the voting or transfer of the Shares pursuant to the
Company's Certificate of Incorporation, bylaws, other governing
documents or, to such counsel's knowledge, any material agreement or
other instrument to which the Company is a party or by which it is
bound; and, to such counsel's knowledge, neither the filing of the
Registration Statement nor the offering or sale of the Shares as
contemplated by this Agreement gives rise to any rights, other than
those which have been waived or satisfied, for or relating to the
registration of any class of the Company's capital stock.
(iii) The Registration Statement has been declared effective
under the Act and to the knowledge of such counsel no stop order
proceedings with respect thereto have been instituted by the
Commission or threatened and all filings required by Rule 424 and Rule
430A of the Rules have been made.
(iv) The Registration Statement, all Preliminary Prospectuses,
the Prospectus and each amendment or supplement thereto, as of their
respective dates they were filed,
12
appeared on their face to comply as to form in all material respects
with the requirements of the Act and the Rules, except that such
counsel need express no opinion as to the information supplied by
the Underwriters or the financial statements, schedules and other
financial or statistical information included therein.
(v) Except as set forth in the Registration Statement and the
Prospectus, to the best of our knowledge, there are no contracts,
agreements or understandings known to such counsel between the Company
and any person granting such person the right 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 to
require the Company to include such securities in the securities being
registered pursuant to a registration statement filed by the Company
under the Act, except for any rights under employee stock compensation
plans, which registration rights are not exercisable with respect to
the transactions contemplated by this Agreement, and except as set
forth in the Prospectus.
(vi) To the knowledge of such counsel, the Company's execution
and delivery of, and performance of its obligations under, this
Agreement do not (A) violate the Company's and its Subsidiaries'
respective charter or bylaws, (B) breach or otherwise violate any
existing obligation of or restriction on the Company or its
Subsidiaries under any order, judgment or decree of any federal or
Delaware court or government authority binding on the Company or its
Subsidiaries that we have, in the exercise of customary professional
diligence, recognized as applicable to the Company or its Subsidiaries
or to transactions of the type contemplated by this Agreement, except
that we do not express an opinion regarding any federal securities
laws or Blue Sky or state securities laws. The execution and delivery
by the Company of, and performance of its obligations under, the
Agreement, do not violate any Delaware or federal statute or
regulation that we have, in the exercise of customary professional
diligence, recognized as applicable to the Company or its Subsidiaries
or to transactions of the type contemplated by the Agreement, except
that we do not express an opinion regarding any federal securities
laws or Blue Sky or state securities laws.
(vii) This Agreement has been duly authorized, executed and
delivered by the Company and is a valid and binding obligation of the
Company.
(viii) No approval, consent, order, authority or permit of
Delaware or any U.S. Federal governmental authority is required on the
part of the Company for the execution and delivery of this Agreement
or for the issuance and sale of the Shares by the Company herein
contemplated (other than required by NASD regulation or state
securities and Blue Sky laws, as to which such counsel need express no
opinion) except such as have been obtained or made, specifying the
same.
In addition to the matters set forth above, such counsel shall also include
a statement to the effect that such counsel has participated in the
preparation of the Registration Statement and the Prospectus and, based on
such participation, no facts have come to the attention of such counsel
which appeared on their face to cause such counsel to believe that any part
of the Registration Statement or any amendment thereto (other than the
financial statements and other financial and statistical data contained
therein, as to which such counsel may express no belief), as of its
effective date, contained
13
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 (other than the financial statements and other
financial data contained therein, as to which such counsel may express
no belief), contains any untrue statement of a material fact or omitted
to state any material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The descriptions in the Registration Statement and
Prospectus of statutes, regulations, legal and governmental proceedings,
matters of law and contracts and other documents are accurate in all
material respects and fairly present the information required to be
shown. Such counsel does not know of any legal or governmental
proceedings required to be described in the Registration Statement 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
Statement or the Prospectus or to be filed as exhibits to the
Registration Statement 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 Statement or the Prospectus. Such counsel may state that
its opinion is limited to the applicable law of the United States of
America, the Delaware General Corporation Law and the general corporate
law of jurisdictions under which the Subsidiaries are organized, and
that such counsel renders no opinion with respect to the law of any
other jurisdiction. Such opinion may state further that whenever such
opinion is based on factual matters to such counsel's knowledge or known
to such counsel, such counsel has relied exclusively on certificates of
officers (after discussion of the contents thereof with such officers)
of the Company or certificates of others as to the existence or
nonexistence of factual matters on which such opinion is predicated but
has no reason to believe that any such certificate is untrue or
inaccurate in any material respect.
Such opinion shall contain only those qualifications as ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel to the Underwriters, may reasonably request or
allow.
(c) The Representatives shall have received from ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, counsel to the Underwriters, an opinion dated the Closing Date,
substantially to the effects specified in subparagraph (iii) and (iv) of
paragraph (b) of this Section 7, and that the Company is a validly
organized and existing corporation under the laws of the State of Delaware.
In rendering such opinion, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ may rely as to all
matters governed other than by Federal law on the opinions of counsel
referred to in paragraph (b) of this Section 7. In addition to the matters
set forth above, such opinion shall also include a statement to the effect
that nothing has come to the attention of such counsel which leads them to
believe that the Registration Statement or any amendment thereto at the
time the Registration Statement or amendment became effective or the
Preliminary Prospectus or the Prospectus or any amendment or supplement
thereto as of their respective dates 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 (except
that such counsel need express no view as to financial statements,
schedules and other financial or statistical information included therein).
(d) The Representatives shall have received at or prior to the
Closing Date from ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ a memorandum or summary, in
form and substance satisfactory to the Representatives, with respect to the
qualification or exemption therefrom for offering and sale by the
Underwriters of the Shares under the State securities or Blue Sky laws of
such jurisdictions as the Representatives may reasonably have designated.
14
(e) The Representatives shall have received on the Closing Date and
on the Option Closing Date, as the case may be, signed letters from
Deloitte & Touche LLP, addressed to the Underwriters dated as of the
Effective Date and again dated as of the Closing Date and as of the Option
Closing Date, as the case may be, with respect to the financial statements
and certain financial and statistical information contained in the
Registration Statement and the Prospectus. All such letters shall be in
form and substance satisfactory to the Representatives and ▇▇▇▇▇▇, ▇▇▇▇▇▇▇
& ▇▇▇▇▇▇▇▇, counsel to the Underwriters.
(f) The Representatives shall have received on the Closing Date and
on the Option Closing Date, as the case may be, a certificate or
certificates of the President & Chief Executive Officer and Vice President
and Chief Financial Officer of the Company to the effect that, on and as of
the Closing Date and on and as of the Option Closing Date, as the case may
be, each of them severally represents as follows:
(i) (A) the representations and warranties of the Company in
this Agreement are true and correct on and as of the Closing Date and
on and as of the Option Closing Date, as the case may be, and (B) the
Company has complied with all of its agreements and covenants and has
satisfied all of the conditions on its part to be performed or
satisfied at or prior to the Closing Date and at or prior to the
Option Closing Date, as the case may be.
(ii) They have carefully examined the Registration Statement and
the Prospectus and, in their opinion, since the Effective Date, (A)
the statements contained in the Registration Statement and the
Prospectus remain true and correct, and (B) such Registration
Statement and Prospectus did not omit to state a material fact
necessary in order to make the statements therein not misleading.
(g) The Company shall have furnished to the Representatives such
additional information and further certificates and documents confirming
the representations and warranties contained herein and related matters as
the Representatives may reasonably have requested.
(h) Since the respective dates as of which information is given in
the Prospectus, there shall not have been any Material Adverse Change.
(i) The Shares shall have been approved for listing on The Nasdaq
National Market, subject to official notice of issuance.
The opinions and certificates mentioned in this Agreement shall be deemed
to be in compliance with the provisions hereof only if they are in all material
respects satisfactory to the Representatives and ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇,
counsel for the Underwriters.
If any of the conditions hereinabove provided for in this Section 7 shall
not have been fulfilled when and as required by this Agreement to be fulfilled,
the obligations of the Underwriters hereunder may be terminated by the
Representatives by notifying the Company of such termination in writing or by
confirmed telefax at or prior to the Closing Date. In such event, the Company
and the Underwriters shall not be under any obligation to each other (except to
the extent provided in Sections 6, 9 and 10 hereof).
15
8. CONDITIONS OF THE OBLIGATIONS OF THE COMPANY. The obligations of the
Company to sell and deliver the Shares are subject to the conditions that (a) at
or before __:00 a.m., central time, on the date of this Agreement, or such later
time and date as the Company and the Representatives may from time to time
consent to in writing or by confirmed telefax, the Registration Statement shall
have become effective, and (b) at the Closing Date no stop order suspending the
effectiveness of the Registration Statement shall have been issued or
proceedings therefor initiated or threatened. If either of the conditions
hereinabove provided for in this Section 8 shall not have been fulfilled when
and as required by this Agreement to be fulfilled, this Agreement may be
terminated by the Company by notifying the Representatives of such termination
in writing or by confirmed telefax at or prior to the Closing Date.
9. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter within the meaning of the Act,
the Rules and the Exchange Act from and against any and all losses, claims,
damages, liabilities, joint or several, to which such Underwriter or such
controlling person may become subject under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) arise out of or are based upon any breach of any
representation, warranty, agreement, or covenant of the Company, or any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading; and the
Company will reimburse each Underwriter and each such controlling person for
legal and other expenses reasonably incurred in connection with investigating or
defending any such loss, claim, damage, liability, action or proceeding;
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 made in, or omission or
alleged omission from, the Registration Statement, any Preliminary Prospectus,
the Prospectus, or such amendment or supplement, in reliance upon and in
conformity with written information furnished to the Company by or through the
Representatives specifically for use in the preparation thereof, it being
understood and agreed that the only such information furnished by any
Underwriter consists of the information described as such in Section 15 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 Section 9(a) shall not
inure to the benefit of any Underwriter from whom the person asserting any such
losses, claims, damages or liabilities purchased the Shares concerned, to the
extent that a prospectus relating to such Shares 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 Shares to such person, a copy of the Prospectus
as then amended or supplemented (excluding any documents incorporated by
reference therein) if the Company had previously furnished copies thereof to
such Underwriter. This indemnity agreement will be in addition to any liability
which the Company may otherwise have.
(b) Each Underwriter severally, but not jointly, will indemnify and hold
harmless the Company, each of its directors, each of its officers who have
signed the Registration Statement, and each person, if any, who controls the
Company, within the meaning of the Act, the Rules and the Exchange Act from and
against any losses, claims, damages or liabilities to which the Company, or any
such director, officer, or controlling person may become subject, under the Act
or otherwise, insofar as such losses, claims, damages or liabilities
16
(or actions or proceedings in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances under which they were made; and will
reimburse any legal or other expenses reasonably incurred by the Company, or
any such director, officer, or controlling person in connection with
investigating or defending any such loss, claim, damage, liability, action or
proceeding; PROVIDED, HOWEVER, that each Underwriter will be liable in such
case only to the extent that such untrue statement, or alleged untrue
statement or omission or alleged omission has been made in the Registration
Statement, any Preliminary Prospectus, the Prospectus, or such amendment or
supplement, in reliance upon and in conformity with information furnished to
the Company by or through the Representatives expressly for use in the
preparation thereof, which information is described in Section 15. This
indemnity agreement will be in addition to any liability which such
Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section 9 of
notice of the commencement of any action or proceeding, such indemnified party
will, if a claim in respect thereof is to be made against an indemnifying party
under this 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
this Section 9, except to the extent that the indemnifying party is
substantially prejudiced by the omission of such notification. In case any such
action or proceeding is brought against any 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
thereof with counsel reasonably satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party under this Section 9 for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened proceeding 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 settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding. Any indemnified party shall
have the right to employ separate counsel in any such action and participate in
the defense thereof, but the fees and expenses of such counsel shall be at the
expense of such indemnified party unless (i) the employment of such counsel has
been specifically authorized in writing by the indemnifying party, (ii) the
indemnifying party has failed to assume the defense and employ counsel, or (iii)
the named parties to any such action (including any impleaded parties) include
such indemnified party and the indemnifying party, as the case may be, and such
indemnified party shall have been advised in writing by such counsel that there
may be one or more legal defenses available to it which are different from or
additional to those available to the indemnifying party, in which case the
indemnifying party shall not have the right to assume the defense of such action
on behalf of such indemnified party, it being understood, however, that (A) the
indemnifying party shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the fees and
expenses of more than one separate firm of attorneys (in addition to any local
counsel) for all such indemnified parties, which firm shall be designated in
writing by the indemnified parties, and that (B) all such fees and expenses
shall be reimbursed as they are incurred. Subject to the foregoing provisions
of this Section 9(c), the indemnifying
17
party shall not be liable for the costs and expenses of any settlement of any
action without the consent of the indemnifying party.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in this Section 9 is for
any reason held to be unavailable to an indemnified party under subsection (a)
or (b) above in respect to any losses, claims, damages, liabilities or expenses
referred to therein, then each applicable indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages,
liabilities and expenses (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 hand from the offering of the Shares or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the parties in connection
with the statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, 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 hand shall be deemed to be in the same proportion as
the total proceeds from the offering (net of underwriting discounts and
commissions but before deducting expenses) received by the Company bears to the
underwriting discounts and commissions received by the Underwriters. The
relative fault of a party 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 each party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to include
any legal or other fees or expenses reasonably incurred by such party in
connection with investigating or defending any such action or claim.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 9, 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 Underwriters
have 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 shall be several in proportion to their respective underwriting
obligations and not joint.
(e) In any proceeding relating to the Registration Statement, any
Preliminary Prospectus, the Prospectus or any supplement or amendment thereto,
each party against whom contribution may be sought under this Section 9 hereby
consents to the jurisdiction of any court having jurisdiction over any other
contributing party, agrees that process issuing from such court may be served
upon him or it by any other contributing party and consents to the service of
such process and agrees that any other contributing party may join him or it as
an additional defendant in any such proceeding in which such other contributing
party is a party.
10. INDEMNIFICATION OF QUALIFIED INDEPENDENT UNDERWRITER.
18
(a) The Company agrees to indemnify and hold harmless ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
& Company LLC, in its capacity as QIU, and each person, if any, who controls the
QIU within the meaning of the Act, the Rules and the Exchange Act from and
against any and all losses, claims, damages, liabilities, joint or several, to
which the QIU or such controlling person may become subject under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of or are based upon any breach of any
representation, warranty, agreement, or covenant of the Company, or any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading; and the
Company will reimburse the QIU and each such controlling person for legal and
other expenses reasonably incurred in connection with investigating or defending
any such loss, claim, damage, liability, action or proceeding.
(b) Promptly after receipt by the QIU under this Section 10 of notice of
the commencement of any action or proceeding, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party under this
Section 10, 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 this
Section 10, except to the extent that the indemnifying party is substantially
prejudiced by the omission of such notification. In case any such action or
proceeding is brought against any 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 thereof with
counsel reasonably satisfactory to such indemnified party, and after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party will not be liable to such
indemnified party under this Section 10 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding 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 settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding. Any indemnified party shall
have the right to employ separate counsel in any such action and participate in
the defense thereof, but the fees and expenses of such counsel shall be at the
expense of such indemnified party unless (i) the employment of such counsel has
been specifically authorized in writing by the indemnifying party, (ii) the
indemnifying party has failed to assume the defense and employ counsel, or (iii)
the named parties to any such action (including any impleaded parties) include
such indemnified party and the indemnifying party, as the case may be, and such
indemnified party shall have been advised in writing by such counsel that there
may be one or more legal defenses available to it which are different from or
additional to those available to the indemnifying party, in which case the
indemnifying party shall not have the right to assume the defense of such action
on behalf of such indemnified party, it being understood, however, that (A) the
indemnifying party shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the fees and
expenses of more than one separate firm of attorneys (in addition to any local
counsel) for all such indemnified parties, which firm shall be designated in
writing by the indemnified parties, and that (B) all such fees and expenses
shall be reimbursed as they are incurred. Subject to the foregoing provisions
of this Section 10(b), the indemnifying party shall not be liable for the costs
and expenses of any settlement of any action without the consent of the
indemnifying party.
19
(c) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in this Section 10 is
for any reason held to be unavailable to an indemnified party under subsection
(a) or (b) above in respect to any losses, claims, damages, liabilities or
expenses referred to therein, then each applicable indemnifying party, in lieu
of indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages,
liabilities and expenses (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the QIU on the
other hand from the offering of the Shares or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the parties in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the QIU on the
other hand shall be deemed to be in the same proportion as the total proceeds
from the offering (net of underwriting discounts and commissions but before
deducting expenses) received by the Company bears to the fees payable to the
QIU. The relative fault of a party 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 each party and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be deemed to
include any legal or other fees or expenses reasonably incurred by such party in
connection with investigating or defending any such action or claim.
The Company and the QIU agree that it would not be just and equitable if
contribution pursuant to this Section 10 were determined by pro rata allocation
(even if the QIU were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to in the immediately preceding paragraph. Notwithstanding the
provisions of this Section 10, no QIU 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 QIU 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 shall be several in proportion
to their respective underwriting obligations and not joint.
(d) In any proceeding relating to the Registration Statement, any
Preliminary Prospectus, the Prospectus or any supplement or amendment thereto,
each party against whom contribution may be sought under this Section 10 hereby
consents to the jurisdiction of any court having jurisdiction over any other
contributing party, agrees that process issuing from such court may be served
upon him or it by any other contributing party and consents to the service of
such process and agrees that any other contributing party may join him or it as
an additional defendant in any such proceeding in which such other contributing
party is a party.
11. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties and agreements of the Company, and the officers of
the Company herein or in certificates delivered pursuant hereto, and the
indemnity and contribution agreements contained in Sections 9 and 10 hereof,
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any Underwriters or any controlling
person, or by or on behalf of the Company or any of its
20
officers, directors or controlling persons, and shall survive delivery of the
Underwritten Shares and, if appropriate, the Option Shares to the
Representatives or termination of this Agreement.
12. DEFAULT BY UNDERWRITERS. If any Underwriter shall fail to
purchase and pay for the Shares which such Underwriter has agreed to purchase
and pay for hereunder (otherwise than by reason of any default on the part of
the Company), you, as the Representatives of the Underwriters, shall use your
best efforts to procure within twenty-four hours thereafter one or more of
the other Underwriters, or any others, to purchase from the Company such
amounts as may be agreed upon and upon the terms set forth herein, the Shares
which the defaulting Underwriter or Underwriters failed to purchase. If
during such twenty-four hours you, as such Representatives, shall not have
procured such other Underwriters, or any others, to purchase the Shares
agreed to be purchased by the defaulting Underwriter or Underwriters, then
(a) if the aggregate number of Shares with respect to which such default
shall occur does not exceed 10% of the Shares which the Underwriters are
obligated to purchase hereby, the other Underwriters shall be obligated,
severally, in proportion to the respective number of Shares which they are
obligated to purchase hereunder, to purchase the Shares which such defaulting
Underwriter or Underwriters failed to purchase, or (b) if the aggregate
number of Shares with respect to which such default shall occur exceeds 10%
of the Company's common stock covered hereby, the Company or you, as the
Representatives of the Underwriters will have the right, by written notice
given within the next twenty-four hour period to the parties to this
Agreement, to terminate this Agreement without liability on the part of the
non-defaulting Underwriters or the Company except to the extent provided in
Section 9 hereof. In the event of a default by any Underwriter or
Underwriters, as set forth in this Section 12, the time of closing may be
postponed for such period, not to exceed seven days, as you, as the
Representatives, may determine in order that the required changes in the
Registration Statement, the Prospectus or in any other documents or
arrangements may be effected. The term "Underwriters" includes any person
substituted for a defaulting Underwriter. Any action taken under Section 12
shall not relieve any defaulting Underwriter from liability in respect of any
default of such Underwriter under this Agreement.
13. NOTICES. All communications hereunder shall be in writing and, except
as otherwise provided in, will be mailed, delivered or telefaxed and confirmed
as follows: if to the Underwriters, c/o the Representatives as follows: to
▇▇▇▇▇▇▇▇ Inc., ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇
▇▇▇▇▇▇, with a copy to C. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇., ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇; if to the Company,
to Power-One, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, with a copy to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, O'Melveny & ▇▇▇▇▇ LLP, ▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
14. TERMINATION. This Agreement may be terminated by notice to the
Company as follows:
(a) at any time prior to the Closing Date if any of the following has
occurred: (i) since the respective dates as of which information is given
in the Registration Statement and the Prospectus, any Material Adverse
Change which would, in your reasonable judgment, materially make it
impracticable to market the Shares in the manner contemplated by the
Prospectus, (ii) any outbreak of hostilities or other national or
international calamity or crisis or change in economic or political
conditions if the effect of such outbreak, calamity, crisis or change on
the financial markets of the United States would, in your reasonable
judgment, make the offering or delivery of the Shares impracticable, (iii)
suspension of trading or general trading halts in securities on the New
York Stock Exchange, the American Stock Exchange, The Nasdaq National
Market or the over-the-counter market or limitation on prices (other than
limitations on hours or numbers of days or trading)
21
for securities on either such Exchange, The Nasdaq National Market or
the over-the-counter market, (iv) the enactment, publication, decree or
other promulgation of any federal or state statute, regulation, rule or
order of any court or other governmental authority which in your
reasonable opinion materially and adversely affects or will materially
or adversely affect the business or operations of the Company, (v)
declaration of a banking moratorium by either federal or state
authorities, or (vi) the taking of any action by any federal, state or
local government or agency in respect of its monetary or fiscal affairs
which in your reasonable opinion has a material adverse effect on the
securities markets in the United States; or
(b) as provided in Sections 7 and 12 of this Agreement.
15. INFORMATION FURNISHED BY UNDERWRITERS. The information set forth in
the Prospectus: (a) in the last paragraph on the cover page, (b) on page __
regarding stabilization, and (c) (i) in the table under the caption
"Underwriting" on page __, listing the Underwriters and the number of shares
each has agreed to purchase, and (ii) in the second paragraph below said table
on page __, relating to the concession to dealers and the reallowance to certain
other dealers under the caption "Underwriting" in the Prospectus, constitute the
written information furnished by or on behalf of any Underwriters referred to in
paragraph (a) (v) of Section 1 hereof and in paragraphs (a) and (b) of Section 9
hereof.
16. SUCCESSORS. This Agreement has been and is made solely for the
benefit of the Underwriters, the Company and their respective successors,
executors, administrators, heirs, and assigns, and the officers, directors and
controlling persons referred to herein, and no other person will have any right
or obligation hereunder. The term "successors" shall not include any purchaser
of the Shares merely because of such purchase.
17. MISCELLANEOUS. The Representatives will act for the several
Underwriters in connection with this offering, and any action under this
Agreement taken by the Representatives jointly or by ▇▇▇▇▇▇▇▇ Inc. will be
binding upon all of the Underwriters.
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
This Agreement shall be governed by, and construed in accordance with, the
laws of the State of Arkansas, without giving effect to the choice of law or
conflict of law principles thereof.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
22
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicates hereof, whereupon it will
become a binding agreement among the Company and the several Underwriters in
accordance with its terms.
Very truly yours,
POWER-ONE, INC.
By: _________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President and Chief Executive Officer
The foregoing Underwriting Agreement is hereby
confirmed and accepted as of the date first above written.
▇▇▇▇▇▇▇▇ INC., ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & COMPANY LLC
AND ▇▇▇▇▇▇▇▇▇▇ SECURITIES
By: ____________________________________
▇▇▇▇▇▇▇▇ Inc., Senior Manager
Name: ___________________________
Title: __________________________
By: ____________________________________
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Company, LLC,
Qualified Independent Underwriter
Name: ___________________________
Title: __________________________
As Representatives of the several Underwriters
named in Schedule I hereto
23
SCHEDULE I
NAME NO. OF UNDERWRITTEN SHARES
---- --------------------------
▇▇▇▇▇▇▇▇ Inc.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Company LLC
▇▇▇▇▇▇▇▇▇▇ Securities
TOTAL
---------
5,000,000
---------
---------
EXHIBIT A
_______________, 1997
▇▇▇▇▇▇▇▇ Inc., ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Company LLC and
▇▇▇▇▇▇▇▇▇▇ Securities, as Representatives of the Several Underwriters
c/o Stephens Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Agreement Not to Sell Power-One, Inc. Stock
________________________________________________
Ladies and Gentlemen:
This letter is provided, at the request of Power-One, Inc. (the "Company"),
for the benefit of the Company and the Underwriters in connection with the
proposed public offering of 5,000,000 shares of Power-One, Inc. Common Stock
(plus an additional 750,000 shares if the Underwriters choose to exercise their
over-allotment option) pursuant to a Registration Statement on Form S-1 (File
No. 333-32889). As an inducement to the Underwriters to (a) enter into an
Underwriting Agreement with the Company and (b) consummate the transactions
contemplated in such Underwriting Agreement, the undersigned hereby represents
and agrees as follows:
1. Upon the closing of the Company's initial public offering, the
undersigned will beneficially own the number of shares of the Company's Common
Stock set forth below opposite the signature of the undersigned (the "Shares"),
and no others.
2. The undersigned agrees that, for a period of 180 days from the
effective date of the Registration Statement, except for bona fide gifts to
persons who agree with you in writing to be bound by this letter, the
undersigned will not offer, sell or otherwise dispose of any of the Shares,
directly or indirectly, without written consent of ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Company
LLC, on behalf of the Representatives of the Underwriters, which consent will
not be unreasonably withheld; except that (a) such Shares may be pledged as
collateral against loans of the undersigned without such written consent, and
(b) if loans secured by Shares are called, the undersigned and any applicable
pledgee will have the right to sell the shares pledged on such loans to the
extent necessary to satisfy such loans.
Shares of Common Stock: Very truly yours,
______________________ ____________________________________
