EXHIBIT 1.1
FORM OF DEALER MANAGER AGREEMENT
February ___, 0000
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Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Ladies/Gentlemen:
1. General. Read-Rite Corporation, a Delaware corporation (the
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"Company"), proposes to offer to exchange $172,500,000 aggregate principal
amount of 10% Convertible Subordinated Notes due September 1, 2004 (the
"Exchange Notes") that are convertible into common stock, par value $0.0001 per
share, (the "Shares") of the Company for $345,000,000 aggregate principal amount
of its outstanding 6 1/2% Convertible Subordinated Notes due September 1, 2004
(the "Existing Notes") (the "Exchange Offer"). For each $2,000 principal amount
of Existing Notes accepted for exchange, the Holder of such Existing Notes will
receive $1,000 principal amount in Exchange Notes. Capitalized terms used herein
without definition shall have their respective meanings set forth in or pursuant
to the Exchange Offer Materials (as defined herein).
2. Engagement as Dealer Manager. By this Dealer Manager Agreement (the
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"Agreement"), the Company hereby engages and appoints you as the exclusive
Dealer Manager for the Exchange Offer and authorizes you to act as such in
connection with the Exchange Offer.
As Dealer Manager you agree, in accordance with your customary
practice, to use reasonable efforts to perform in connection with the Exchange
Offer those services as are customarily performed by investment banking concerns
in connection with similar offers, including, without limitation, soliciting
from individuals and institutions the tender of the Existing Notes pursuant to
and in accordance with the terms and conditions of the Exchange Offer. You
shall act as an independent contractor in connection with the Exchange Offer
with duties solely to the Company and nothing herein contained shall constitute
you as an agent of the Company in connection with the solicitation of the tender
of Existing Notes pursuant to and in accordance with the terms and conditions of
the Exchange Offer; provided, however, that the Company hereby authorizes the
Dealer Manager and/or one or more registered brokers or dealers chosen by the
Dealer Manager, to act as the Company's agent in making the Exchange Offer to
residents of any jurisdiction in which such agent designation may be necessary
to comply with applicable law. Nothing in this Agreement shall constitute the
Dealer Manager a partner or joint venturer with the Company or any of its
subsidiaries. On the basis of the representations and warranties and agreements
of the Company contained herein and subject to and in accordance with the terms
and conditions hereof and of the Exchange Offer, the Dealer Manager agrees to
act in such capacity.
3. Registration Statement, Offering Circular/Prospectus and Offering
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Materials.
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(a) The Company has prepared and filed with the Securities and
Exchange Commission (the "Commission"), under the Securities Act of 1933, as
amended (the "Securities Act"), the Trust Indenture Act of 1939, as amended (the
"TIA"), and applicable rules and regulations (the "Rules and Regulations") of
the Commission under both Acts, a registration statement on Form S-4 (333-
95527), including a Prospectus, covering the registration of the offer and sale
of the Exchange Notes; the Shares issuable upon conversion of the Exchange
Notes; the Shares that may be issued solely at the Company's option as payment
of interest on the Exchange Notes; and the Rights, if any, issuable under the
Preferred Shares Rights Agreement. The term "Registration Statement" as used in
this Agreement shall mean such registration statement, including financial
statements, schedules and exhibits, in the form in which it becomes effective
and, in the event of any amendment thereto or the filing of any abbreviated
registration statement pursuant to Rule 462(b) of the Rules and Regulations
relating thereto after the effective date of such registration statement, shall
also mean (from and after the effectiveness of such amendment or the filing of
such abbreviated registration statement) such registration statement as so
amended, together with any such abbreviated registration statement. The term
"Prospectus" as used in this Agreement shall mean the final prospectus included
in the Registration Statement. Notwithstanding the foregoing, if any revised
prospectus shall be provided to you by the Company for use in connection with
the Exchange Offer that differs from the Prospectus referred to in the
immediately preceding sentence (whether or not such revised prospectus is
required to be filed with the Commission pursuant to Rule 424(b) of the Rules
and Regulations), the term "Prospectus" shall refer to such revised prospectus
from and after the time it is first provided to you for such use. Any reference
to the Registration Statement or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to Item 11 of
Form S-4 under the Securities Act, as of the date of the Registration Statement
or the Prospectus, as the case may be, and any reference to any amendment or
supplement to the Registration Statement or the Prospectus shall be deemed to
refer to and include any documents filed after such date under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and the rules and
regulations of the Commission thereunder, which, upon filing, are incorporated
by reference therein, as required by Item 11 of Form S-4. As used in this
Agreement, the term "Incorporated Documents" means the documents which at the
time are incorporated by reference in the Registration Statement, the Prospectus
or any amendment or supplement thereto. The terms "supplement" and "amendment"
or "supplemented" and "amended" as used herein with respect to the Prospectus
shall include all documents deemed to be incorporated by reference in the
Prospectus that are filed subsequent to the date of the Prospectus and prior to
the termination of the Exchange Offer by the Company with the Commission
pursuant to the Exchange Act and the rules and regulations of the Commission
thereunder.
(b) The Company has prepared and filed, or agrees that prior to or on
the date of commencement of the Exchange Offer (the "Commencement Date") it will
file, with the Commission under the Exchange Act and the rules and regulations
of the Commission promulgated thereunder a Statement on Schedule TO with respect
to the Exchange Offer,
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including the exhibits thereto and any documents incorporated by reference
therein. The term "Schedule TO" as used in this Agreement shall mean such
Schedule TO, including any amendment or supplement thereto.
(c) The Registration Statement, Prospectus, Schedule TO, the related
letters from the Dealer Manager to securities brokers, dealers, commercial
banks, trust companies and other nominees that have been approved for use by the
Company, which approval shall not be unreasonably withheld, letters to
beneficial owners of Existing Notes, the Letter of Transmittal and any newspaper
announcements, if any, press releases and other exchange offer solicitation
materials and information the Company may prepare, approve, publicly
disseminate, provide to registered or beneficial Holders of Existing Notes or
authorize for public dissemination or use by registered or beneficial Holders of
Existing Notes in connection with the Exchange Offer, are collectively referred
to as the "Exchange Offer Materials."
4. Use of Exchange Offer Material.
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(a) The Exchange Offer Materials have been or will be prepared and
approved by, and are the sole responsibility of, the Company. The Company shall
disseminate or, to the extent permitted by law use its best efforts to
disseminate, the Exchange Offer Materials to each registered Holder of any
Existing Notes, as soon as practicable on the Commencement Date, pursuant to
Rule 13e-4 under the Exchange Act, and comply with its obligations thereunder.
Thereafter, to the extent practicable until three days prior to the Expiration
Date of the Exchange Offer, the Company shall use its best efforts to cause
copies of such Exchange Offer Materials and a return envelope to be mailed to
each person who becomes a Holder of record of any Existing Notes. The Company
acknowledges and agrees that you may use the Exchange Offer Materials as
specified herein without assuming any responsibility for independent
verification on your part other than information about the Dealer Manager
supplied by you in writing and the Company represents and warrants to you that
you may rely on the accuracy and completeness of any information delivered to
you by or on behalf of the Company without assuming any responsibility for
independent verification of such information and without performing or receiving
any appraisal or evaluation of the assets or liabilities of the Company.
(b) The Company agrees to provide you with as many copies as you may
reasonably request of the Exchange Offer Materials. The Company agrees that
within a reasonable time prior to using or filing with the Commission or any
governmental or regulatory entity or agency (an "Other Agency"), including the
National Association of Securities Dealers, Inc. (the "NASD"), of any Exchange
Offer Materials, it will submit copies of such materials to you and your counsel
("Dealer Manager's Counsel") and will give reasonable consideration to your and
your counsel's comments, if any, thereon. The Company agrees prior to the
termination of the Exchange Offer, before amending or supplementing the
Registration Statement or the Prospectus, to furnish copies of drafts to, and
consult with, you and your counsel within a reasonable time in advance of filing
with the Commission of any amendment or supplement to the Registration
Statement, the Prospectus or the other Exchange Offer Materials and will give
reasonable consideration to your and your counsel's comments, if any, thereon.
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(c) The Company has furnished or shall use its best efforts to furnish
to you, or cause the transfer agents or registrars for the Exchange Notes to
furnish to you, as soon as practicable after the date hereof (to the extent not
previously furnished), cards or lists in reasonable quantities or copies thereof
showing the names of persons who were the holders of record or, to the extent
available, the beneficial owners of the Exchange Notes as of a recent date,
together with their addresses and the aggregate principal amount at maturity of
the Exchange Notes held by them. Additionally, the Company shall update, or
cause the transfer agents or registrars referred to above to update, such
information from time to time during the term of this Agreement as may be
reasonably requested by you. Except as otherwise provided herein, you agree to
use such information only in connection with the Exchange Offer.
(d) The Company authorizes the Dealer Manager to use the Exchange
Offer Materials in connection with the Exchange Offer for such period of time as
any such materials are required by law to be delivered in connection therewith.
The Dealer Manager shall not have any obligation to cause any Exchange Offer
Materials to be transmitted generally to the Holders of Existing Notes.
(e) The Company authorizes the Dealer Manager to communicate with any
information agent (the "Information Agent") or exchange agent (the "Exchange
Agent") appointed by the Company to act in such capacity in connection with the
Exchange Offer. The Company will arrange for the Exchange Agent to advise you,
as necessary and at least daily, as to such matters relating to the Exchange
Offer as you may reasonably request.
(f) The Company agrees that any reference to the Dealer Manager in any
Exchange Offer Materials or in any newspaper announcement or press release or
other document or communication is subject to the Dealer Manager's prior
consent, which consent shall not be unreasonably withheld.
5. Withdrawal. In the event that the Company (i) uses or permits the use
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of, or files with the Commission or any Other Agency, any Exchange Offer
Materials or any amendment or supplement to the Registration Statement or the
Prospectus, and such document (a) has not been submitted to you previously for
your and your counsel's comments or (b) has been so submitted, and you or your
counsel have made comments which have not been reflected in a manner reasonably
satisfactory to you or your counsel; or (ii) shall have breached, in any
material respect, any of its representations, warranties, agreements or
covenants herein; or (iii) amend or revise the Exchange Offer in a manner not
reasonably acceptable to you then you shall be entitled to withdraw as Dealer
Manager in connection with the Exchange Offer without any liability or penalty
to you and without loss of any right to indemnification or contribution provided
in Section 11 or to the payment of all fees and expenses payable under Sections
6 and 7 below which have accrued to the date of such withdrawal (it being agreed
that in the event of any such withdrawal, for the purpose of determining the
fees payable to you pursuant to Section 6, the aggregate principal amount of
Existing Notes tendered pursuant to the Exchange Offer as of the close of
business on the date of such withdrawal which are thereafter acquired by the
Company
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or any of its subsidiaries or affiliates pursuant to the Exchange Offer or
otherwise shall be deemed to have been acquired as of the date of such
withdrawal).
6. Fees. As compensation for your services in connection with the
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Exchange Offer, the Company will pay you a fee determined in accordance with the
fee schedule set forth below as of the Expiration Date with regard to the
Existing Notes validly tendered and accepted for exchange pursuant to the
Exchange Offer:
Percentage of Aggregate Principal
Amount of Existing Notes Converted Graduated Fee Total Fees
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0.00% to 45.00% 0.500% $ 776,000
45.01% to 60.00% 1.000% $1,294,000
60.01% to 75.00% 2.250% $2,458,000
75.01% to 100% 3.500% $4,269,000
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Total
Such fee shall be paid by the Company on the date when the Exchange Offer is
consummated (the "Closing Date"). The total fee to be paid in additional
Exchange Notes will be equal to the principal amount of total fees due and
payable.
7. Expenses.
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(a) The Company agrees that it will pay the costs and expenses
incident to the performance of the obligations hereunder, including, without
limitation (i) all costs and expenses incurred by dealers and brokers (including
yourself), commercial banks, trust companies and nominees for their customary
mailing and handling expenses incurred in forwarding the Exchange Offer
Materials to their customers, (ii) the filing fees and expenses, if any,
incurred with respect to any filing with the NASD, (iii) all costs and expenses
incident to the preparation, issuance, execution and delivery of the Exchange
Notes upon exchange of the Existing Notes, (iv) all costs and expenses incident
to the preparation, printing and filing under the Securities Act of the
Registration Statement and the Prospectus (including, without limitation, in
each case all exhibits, amendments and supplements thereto), (v) all costs and
expenses incurred in connection with the registration or qualification of the
Exchange Notes issuable upon exchange of the Existing Notes under the laws of
such jurisdictions as the Dealer Manager may designate, if any (including,
without limitation, reasonable fees of counsel for the Dealer Manager and its
reasonable disbursements), (vi) all costs and expenses incurred in connection
with the printing (including word processing and duplication costs) and delivery
of all Exchange Offer Materials (including, without limitation, any preliminary
and supplemental blue sky memoranda) including, without limitation, mailing and
shipping; (vii) all advertising expenses related to the Exchange Offer and the
fees and expenses of the Exchange Agent and the Information Agent;
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(viii) all fees and expenses incurred in marketing the Exchange Offer, including
but not limited to road show presentations, if any; but excluding travel and
related expenses incurred by Dealer Manager, and (ix) the fees and disbursements
of Wilson, Sonsini, Xxxxxxxx and Xxxxxx, counsel to the Company, and Ernst &
Young LLP, auditors to the Company. In addition, the Company agrees to reimburse
the reasonable out-of-pocket expenses of the Dealer Manager in connection with
the Exchange Offer, including without limitation, reasonable legal fees and
expenses of Dealer Manager's Counsel in connection with the Exchange Offer.
8. Representations, Warranties and Agreements of the Company. The Company
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represents and warrants to you, and agrees with you, that:
(a) The Registration Statement, including the Prospectus, has been
prepared by the Company in conformity with the requirements of the Securities
Act and the Rules and Regulations and has been filed with the Commission; such
amendments to such Registration Statement and Prospectus and such abbreviated
registration statements pursuant to Rule 462(b) of the Rules and Regulations as
may have been required prior to the date hereof have been similarly prepared and
filed with the Commission; and the Company will file such additional amendments
to such Registration Statement and Prospectus and such abbreviated registration
statements as may hereafter be required. Copies of such Registration Statement
and Prospectus, including all amendments thereto and all documents incorporated
by reference therein, and of any abbreviated registration statement pursuant to
Rule 462(b) of the Rules and Regulations have been or, if filed after the
Commencement Date, will be, delivered or made available to you and your counsel.
(b) The Schedule TO has been prepared by the Company in conformity
with the requirements of the Exchange Act and the rules and regulations of the
Commission thereunder and has been filed with the Commission; such amendments to
such Schedule TO as may have been required prior to the date hereof have been
similarly prepared and filed with the Commission; and the Company will file such
additional amendments to such Schedule TO as may hereafter be required. Copies
of such Schedule TO, including all amendments thereto and all documents
incorporated by reference therein have been or, if filed after the Commencement
Date, will be, delivered or made available to you and your counsel.
(c) The Registration Statement, including the Prospectus, has been
filed as of the Commencement Date and will become effective not later than the
Expiration Date; and the Commission has not issued any order refusing or
suspending the effectiveness of the Registration Statement or preventing or
suspending the use of any Prospectus or instituted proceedings for that purpose.
The Exchange Offer Materials, including the Registration Statement, the Schedule
TO and the Prospectus, comply and, as amended or supplemented, if applicable,
will comply in all material respects with the Securities Act, the Exchange Act
and the TIA, and the applicable rules and regulations of the Commission
thereunder. The Registration Statement, when it becomes effective, will not
contain and, as amended or supplemented, if applicable, will not contain, any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading.
None of the
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Prospectus or other Exchange Offer Materials contains, and, as amended or
supplemented, if applicable, will contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading;
provided, however, that none of the representations and warranties contained in
this subparagraph (c) shall apply to information contained in or omitted from
the Exchange Offer Materials or the Registration Statement or Prospectus, or any
amendment or supplement thereto, in reliance upon, and in conformity with,
written information relating to you furnished to the Company by you specifically
for use in the preparation thereof.
The Incorporated Documents heretofore filed, when they were filed (or,
if any amendment with respect to any such document was filed, when such
amendment was filed), conformed in all material respects with the requirements
of the Exchange Act and the rules and regulations of the Commission thereunder;
any further Incorporated Documents so filed will, when they are filed, conform
in all material respects with the requirements of the Exchange Act and the rules
and regulations of the Commission thereunder; no such document when it was filed
(or, if an amendment with respect to any such document was filed, when such
amendment was filed) contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; and no such further amendment will
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading.
(d) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the jurisdiction of its
incorporation with full power and authority (corporate and other) to own, lease
and operate its properties and conduct its business as described in the
Prospectus; the Company is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which the ownership
or leasing of its properties or the conduct of its business requires such
qualification, except where the failure to be so qualified or be in good
standing would not have a material adverse effect on the condition (financial or
otherwise), earnings, operations, business or business prospects of the Company
and its subsidiaries taken as a whole ("Material Adverse Effect").
(e) Each of the Company's significant subsidiaries listed below has
been duly incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation, and has the corporate power
to own, lease and operate its properties and to conduct its business as
described in the Prospectus, and is qualified to do business as a foreign
corporation and is in good standing in each jurisdiction, if any, in which the
ownership and leasing of its properties or the conduct of its business requires
such qualification, except where the failure to be so qualified or be in good
standing would not have a Material Adverse Effect. The Company does not have
any "significant subsidiaries" as defined in Rule 405 under the Securities Act
except Read-Rite International, Read-Rite (Thailand) Co., Ltd., Read-Rite SMI
Corporation and Read-Rite Philippines Inc. which together are referred to as
"Significant Subsidiaries."
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(f) All of the issued and outstanding shares of capital stock of each
of the Significant Subsidiaries as been duly authorized and validly issued and
are fully paid and nonassessable, and, has not been issued in violation of or
subject to any preemptive right, co-sale right, registration right, right of
first refusal or other similar right and, except as disclosed in the
Registration Statement, Prospectus and Exchange Offer Materials, are owned by
the Company, (except for directors' qualifying shares and the minority interest
in Read-Rite SMI Corporation held by Sumitomo Metal Industries, Ltd.
("Sumitomo"), free and clear of any pledge, lien, security interest,
encumbrance, claim or equitable interest (except for certain restrictions
contained in Article 5 and Article 14.4 of the Joint Venture Agreement dated as
of June 14, 1991 between the Company and Sumitomo) (other than such preemptive
rights or other rights to subscribe for or purchase securities as were fully
complied with or expressly waived or with respect to the violation of which the
right to make a claim is barred by the applicable statute of limitations).
(g) The Company has full legal right, power and authority to enter
into and perform its obligations under this Agreement, the Indenture and the
Exchange Notes and to consummate the Exchange Offer and all other transactions
contemplated in the Exchange Offer Materials. The Exchange Offer and all other
actions by the Company contemplated in the Exchange Offer Materials have been
duly and validly authorized by all necessary corporate action by the Company,
and no other corporate proceedings by the Company are necessary to authorize
such actions. This Agreement has been duly authorized, executed and delivered
by the Company and is a legal, valid and binding agreement on the part of the
Company, enforceable in accordance with its terms, except as rights to
indemnification hereunder may be limited by applicable law and except as the
enforcement hereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors' rights generally or by general equitable principles; the execution
and delivery by the Company of, and the performance by the Company of its
obligations under this Agreement, the Exchange Offer, the issuance and delivery
by the Company of the Exchange Notes pursuant to the Exchange Offer, the
consummation of the Exchange Offer, and the other transactions contemplated in
the Exchange Offer Materials, and the fulfillment of the terms hereof and
thereof, do not and will not result in a material breach or violation of any of
the terms and provisions of, or constitute a material default under, (i) any
material bond, debenture, note or other evidence of indebtedness, or under any
material lease, contract, indenture, mortgage, deed of trust, loan agreement,
joint venture or other material agreement or instrument to which the Company or
any of its subsidiaries is a party or by which it or any of its subsidiaries or
their respective properties may be bound, (ii) the charter or bylaws of the
Company or any of its subsidiaries, or (iii) any law, order, rule, regulation,
writ, injunction, judgment or decree of any court, government or governmental
agency or body, domestic or foreign, having jurisdiction over the Company or any
of its subsidiaries or over their respective properties except where such
breach, violation, or default would not have a Material Adverse Effect. No
consent, approval, authorization, permit or order of or qualification with any
court, government or governmental agency or body, domestic or foreign, having
jurisdiction over the Company or any of its subsidiaries or over their
respective properties is required for the execution and delivery of this
Agreement, the Exchange Offer, the issuance and delivery of the Exchange Notes
pursuant to the
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Exchange Offer, and the consummation by the Company or any of its subsidiaries
of the transactions contemplated herein or in the Exchange Offer Materials,
except such as may be required under the Securities Act, the Exchange Act, or
under state or other securities, or Blue Sky laws, all of which requirements
have been satisfied other than as contemplated by such agreements or except
where such requirement would not have a material adverse effect on the execution
and delivery of this Agreement, the Exchange Offer, the execution and delivery
of the Indenture, the issuance of the Exchange Notes or the consummation of the
transactions contemplated herein or in the Exchange Offer Materials.
Notwithstanding the foregoing, to the extent any of the foregoing
representations speak as to any of the Company's subsidiaries, such
representations shall be deemed to be made only as it relates to the execution
and delivery by the Company of, and the performance by the Company of its
obligations under, this Agreement, the Exchange Offer, the issuance and delivery
by the Company of the Exchange Notes pursuant to the Exchange Offer, and the
consummation of the Exchange Offer, but no other transaction contemplated in the
Exchange Offer Materials.
(h) Except as disclosed in the Exchange Offer Materials, there is not
any pending or, to the best of the Company's knowledge, threatened action, suit,
claim or proceeding against the Company, any of its subsidiaries or any of their
respective officers or any of their respective properties, assets or rights
before any court, government or governmental agency or body, domestic or
foreign, having jurisdiction over the Company or any of its subsidiaries or over
their respective officers or properties or otherwise which might prevent
consummation of the Exchange Offer, the transactions contemplated hereby or
thereby or the other transactions contemplated in the Exchange Offer Materials
that has not been accurately described in all material respects in the
Registration Statement or the Prospectus; and there are no agreements,
contracts, leases or documents of the Company or any of its subsidiaries of a
character required to be described or referred to in the Registration Statement
or the Prospectus or any Incorporated Document or to be filed as an exhibit to
the Registration Statement or any Incorporated Document by the Securities Act or
the rules and regulations thereunder or by the Exchange Act or the rules and
regulations of the Commission thereunder which have not been accurately
described in all material respects in the Registration Statement or Prospectus
or any Incorporated Document or filed as exhibits to the Registration Statement
or any Incorporated Document.
(i) All outstanding shares of capital stock of the Company have been
duly authorized and validly issued and are fully paid and nonassessable, have
been issued in compliance with all federal and state securities laws, were not
issued in violation of or subject to any preemptive rights or other rights to
subscribe for or purchase securities, and the authorized and outstanding capital
stock of the Company is as set forth in the Prospectus under the caption
"Capitalization" and conforms in all material respects to the statements
relating thereto contained in the Registration Statement and the Prospectus and
any Incorporated Document (and such statements correctly state the substance of
the instruments defining the capitalization of the Company); the Shares issuable
pursuant to the terms of the Exchange Notes have been duly authorized for
issuance and delivery and, when issued and delivered by the Company in
accordance with the terms of the Exchange Notes will be duly and validly issued
and fully paid and nonassessable, and will be free and clear of any pledge,
lien, security interest, encumbrance,
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claim or equitable interest; and no preemptive right, co-sale right,
registration right, right of first refusal or other similar right of
shareholders exists with respect to any of the Shares issuable in the Exchange
Offer or the issuance thereof other than those that have been expressly waived
prior to the date hereof and those that will automatically expire upon and will
not apply to the consummation of the transactions contemplated on or before the
Closing Date; and the Rights, if any, issuable under the Preferred Shares Rights
Agreement have been duly authorized and when, and if, issued upon the terms of
the Preferred Shares Rights Agreement will be valid and binding obligations of
the Company enforceable in accordance with their terms. No further approval or
authorization of any shareholder, the Board of Directors of the Company or
others is required for the issuance or transfer of the Shares issuable in
accordance with the Exchange Notes and except as may be required under the
Securities Act, the Exchange Act or under state or other securities or Blue Sky
laws.
(j) The Indenture has been or will be duly authorized by the Company,
has been filed as of the Commencement Date, will be qualified under the TIA not
later than the Expiration Date, and assuming due authorization, execution and
delivery of the Indenture by the Trustee, when executed and delivered by the
Company, will constitute a valid and binding agreement of the Company,
enforceable in accordance with its terms, except as the enforcement thereof may
be limited by (i) bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer or other similar laws affecting enforcement of creditors' rights
generally and (ii) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity).
(k) The Exchange Notes to be issued pursuant to the Exchange Offer
have been authorized, and assuming due authorization, execution and delivery of
the Indenture by the Trustee, when executed and authenticated in accordance with
the provisions of the Indenture and delivered in accordance with the terms of
the Exchange Offer, will be entitled to the benefits of the Indenture and will
be valid and binding obligations of the Company enforceable in accordance with
their terms, except as the enforcement thereof may be limited by the (i)
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other
similar laws affecting enforcement of creditors' rights generally and (ii)
general principles of equity (regardless of whether enforceability is considered
in a proceeding at law or in equity); the Exchange Notes will conform in all
material respects to the description thereof contained in the Registration
Statement and Prospectus.
(l) The consolidated financial statements (including the related
notes) included or incorporated by reference in the Registration Statement and
the Prospectus (and any amendments or supplements thereto) present fairly, in
all material respects, the financial position, the results of operations and
cash flows of the Company at the dates and for the periods indicated in
accordance with generally accepted accounting principles applied on a consistent
basis throughout the periods indicated except as may otherwise be stated
therein. The interim consolidated financial statements (including the related
notes) included or incorporated by reference in the Registration Statement and
the Prospectus (and any amendments and supplements thereto) have been prepared
on a basis consistent with the audited consolidated
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financial statements except as otherwise stated therein, and include in your
opinion all adjustments, including normal recurring adjustments necessary to
present fairly the financial information therein. The selected and summary
consolidated financial and statistical data included in the Registration
Statement and the Prospectus (and any amendments or supplements thereto) present
fairly the information shown therein and have been compiled on a basis
consistent with the audited financial statements presented therein. No financial
statements or schedules, other than the consolidated financial statements or
schedules that are included in the Registration Statement and the Prospectus
(and any amendments or supplements thereto), are required to be included
therein.
(m) Except as disclosed in the Registration Statement and Prospectus,
the Common Stock is registered pursuant to Section 12(g) of the Exchange Act and
has been accepted for quotation on The NASDAQ Stock Market, and the Company has
taken no action designed to, or likely to have the effect of, terminating the
registration of the Common Stock under the Exchange Act or delisting the Common
Stock from The NASDAQ Stock Market, nor has the Company received any
notification that the Commission or NASD is contemplating terminating such
registration or listing.
(n) The Company has conducted, and intends in the future to conduct,
its affairs in such a manner as to ensure that it is not and will not become an
"investment company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940, as amended (the "1940 Act"),
and the rules and regulations thereunder.
(o) The Company has not distributed and will not distribute prior to
the later of (i) the Closing Date, and (ii) completion of the distribution of
the Exchange Notes in exchange for the Existing Notes pursuant to the Exchange
Offer, any offering material in connection with the Exchange Offer other than
the Exchange Offer Materials.
(p) The Company has not taken and will not take, directly or
indirectly, any action resulting in a violation of Rule 102 promulgated under
the Exchange Act or designed to or that might reasonably be expected to cause or
result in stabilization or manipulation of the price of the Common Stock to
facilitate the distribution of the Exchange Notes.
(q) The Exchange Agent Agreement between the Company and Norwest Bank
Minnesota, National Association (the "Exchange Agent Agreement") is or will be
in full force and effect.
(r) Except as disclosed in the Prospectus, neither the Company nor any
of its subsidiaries is 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, 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
-11-
claim relating to any environmental laws, which violation, contamination,
liability or claim would, individually or in the aggregate, have a Material
Adverse Effect; and the Company is not aware of any pending investigation which
would reasonably be expected to lead to such a claim.
(s) All written communications, in addition to the Schedule TO, made
during the period from the first public announcement and to the earlier of
either the termination date or the Closing Date of the Exchange Offer have been
or will be filed with the SEC in accordance with the Exchange Act and the SEC's
rules and regulations including Rule 13e-4 under the Exchange Act.
9. Further Agreements of the Company. The Company agrees with you that:
---------------------------------
(a) The Company will use its best efforts to cause the Registration
Statement and any amendment thereof to become effective as soon as possible but
no later than the Expiration Date; the Company will use its best efforts to
cause any abbreviated registration statement pursuant to Rule 462(b) of the
rules and regulations as may be required subsequent to the date the Registration
Statement is declared effective to become effective as promptly as possible; the
Company will notify you, promptly after it shall receive notice thereof, of the
time when the Registration Statement, any subsequent amendment to the
Registration Statement or any abbreviated registration statement has become
effective or any supplement to the Prospectus or additional Exchange Offer
Materials has been filed; if for any reason the filing of the final form of
Prospectus is required under Rule 424(b)(3) of the rules and regulations, it
will provide evidence satisfactory to you that the Prospectus contains such
information and has been filed with the Commission within the time period
prescribed; it will notify you promptly of any request by the Commission for the
amending or supplementing of the Registration Statement or the Prospectus or
other Exchange Offer Materials or for additional information relating to the
Exchange Offer; promptly upon your request, it will prepare and file with the
Commission any amendments or supplements to the Registration Statement or
Prospectus or other Exchange Offer Materials which, in the opinion of Dealer
Manager's Counsel, may be necessary or advisable in connection with the Exchange
Offer; it will promptly prepare and file with the Commission, and promptly
notify you of the filing of, any amendments or supplements to the Registration
Statement or the Prospectus or other Exchange Offer Materials which may be
necessary to correct any statements or omissions, if, at any time when a
Prospectus relating to the Exchange Offer is required to be delivered under the
Securities Act and the Exchange Act, any event shall have occurred as a result
of which the Prospectus or any other prospectus relating to the Exchange Offer
as then in effect would include any untrue statement of a material fact or omit
to state a material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading; and it will file
no amendment or supplement to the Registration Statement or the Prospectus or
other Exchange Offer Materials or the Incorporated Documents, or, prior to the
end of the period of time in which the Exchange Offer Materials relating to the
Exchange Offer are required to be delivered under the Securities Act and the
Exchange Act, file any document which upon filing becomes an Incorporated
Document, which shall not previously have been submitted to you a reasonable
time prior to the proposed filing thereof and will give reasonable consideration
to you or your counsel's
-12-
comments, if any, thereon, subject, however, to compliance with the Securities
Act and the Rules and Regulations, the Exchange Act and the rules and
regulations of the Commission thereunder and the provisions of this Agreement.
Notwithstanding anything else to the contrary set forth in this Agreement, the
Company reserves the right to terminate the Exchange Offer prior to the
Expiration Date of the Exchange Offer or amend or modify the business terms of
the Exchange Offer in its sole and absolute discretion, subject to the Company's
obligations under Sections 6, 7 and 11 of this Agreement in the event that the
Dealer Manager withdraws pursuant to Section 5 as a result of any such
termination, amendment or modification.
(b) The Company will advise you, promptly after it shall receive
notice or obtain knowledge, of the issuance of any order by the Commission
refusing or suspending the effectiveness of the Registration Statement or of the
initiation or threat of any proceeding for that purpose; and it will promptly
use its best efforts to prevent the issuance of any refusal or stop order or to
obtain its withdrawal at the earliest possible moment if such refusal or stop
order should be issued.
(c) The Company will use its best efforts to qualify the Exchange
Notes issuable pursuant to the Exchange Offer under the securities laws of such
jurisdictions as you may designate and to continue such qualifications in effect
for so long as may be required for purposes of the Exchange Offer, except that
the Company shall not be required in connection therewith or as a condition
thereof to qualify as a foreign corporation or to execute a general consent to
service of process in any jurisdiction in which it is not otherwise required to
be so qualified or to so execute a general consent to service of process. In
each jurisdiction in which the Exchange Notes shall have been qualified as above
provided, the Company will make and file such statements and reports in each
year as are or may be required by the laws of such jurisdiction.
(d) To make generally available to its security holders and to the
Dealer Manager by filing with the SEC as soon as practicable, an earnings
statement covering a twelve-month period beginning not later than the first day
of the Company's fiscal quarter next following the effective date of the
Registration Statement that satisfies the provisions of Section 11(a) of the
Securities Act and the rules and regulations of the Commission thereunder.
(e) To use its best efforts to advise or cause the Exchange Agent to
advise the Dealer Manager at 5:00 P.M., Eastern Standard Time, or promptly
thereafter, daily (or more frequently if requested), by telephone or facsimile
transmission, with respect to Existing Notes tendered as follows: (i) the
aggregate principal amount of Existing Notes validly tendered and represented by
confirmations of receipt of book-entry transfer of Existing Notes pursuant to
the procedures set forth in the Exchange Offer on such day; (ii) the aggregate
principal amount of any Existing Notes properly withdrawn on such day; and (iii)
the cumulative totals of the principal amount of Existing Notes in categories
(i) through (ii), inclusive, above.
(f) Without limiting Sections 5, 7 and 13 of this Agreement, if the
transactions contemplated hereby are not consummated by reason of any failure,
refusal or
-13-
inability on the part of the Company to perform any agreement on its part to be
performed hereunder or to fulfill any condition of your obligations hereunder,
the Company will reimburse the you for all out-of-pocket expenses (including
fees and disbursements of Dealer Manager's Counsel) incurred by you in
connection with the Exchange Offer.
-14-
10. Conditions of Dealer Manager's Obligations. Your obligations as
------------------------------------------
provided herein shall be subject at all times on and prior to the Closing Date,
to the accuracy of the representations and warranties of the Company herein, to
the accuracy of the statements of officers of the Company made pursuant to the
provisions hereof, to the performance by the Company of its obligations
hereunder and to the following additional conditions:
(a) The Registration Statement shall have been filed prior to the
Commencement Date and no stop order refusing the effectiveness thereof shall
have been issued and the Registration Statement shall become effective prior to
the Expiration Date and no stop order suspending the effectiveness thereof shall
have been issued and no proceedings for either purpose shall have been initiated
or, to the knowledge of the Company or you, threatened by the Commission, and
any request of the Commission for additional information (to be included in the
Registration Statement, the Prospectus, any Incorporated Document, or other
Exchange Offer Materials or otherwise) shall have been complied with to the
reasonable satisfaction of Dealer Manager's Counsel.
(b) After execution and delivery of this Agreement and prior to the
Closing Date there shall not have occurred from that described in the Prospectus
(a) any adverse change or development in the condition (financial or otherwise),
earnings, operations, business or business prospects of the Company and its
subsidiaries considered as one enterprise, (b) any obligation, direct or
contingent, incurred by the Company or its subsidiaries, except obligations
incurred in the ordinary course of business, (d) any change in the capital stock
or outstanding indebtedness of the Company, (e) any dividend or distribution of
any kind declared, paid or made on the capital stock of the Company; or (f) any
loss or damage (whether or not insured) to the property of the Company or any of
its subsidiaries which has been sustained or will have been sustained that
either individually or in the aggregate, in the Dealer Manager's reasonable
judgment, are material and adverse and that makes it, in the Dealer Manager's
judgment impracticable to recommend that holders of Existing Notes participate
in the Exchange Offer on the terms and in the manner contemplated in the
Registration Statement.
(c) All corporate proceedings and other legal matters in connection
with this Agreement, the Registration Statement, the Prospectus, other Exchange
Offer Materials or otherwise, and the registration, authorization, issue, and
delivery of the Exchange Notes issuable in accordance with the Exchange Offer,
shall have been reasonably satisfactory to Dealer Manager's Counsel, and such
counsel shall have been furnished with such papers and information as they may
reasonably have requested to enable them to pass upon the matters referred to in
this Section.
(d) You shall have received the opinion of Wilson, Sonsini, Xxxxxxxx
and Xxxxxx, counsel for the Company, dated the Closing Date, respectively,
addressed to you to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the state
of Delaware;
-15-
(ii) The Company has the corporate power and corporate authority
to enter into this Agreement, the Exchange Agent Agreement, the
Information Agent Agreement, and the Indenture under which the
Exchange Notes will be issued pursuant to the Exchange Offer;
(iii) This Agreement, the performance by the Company of it
obligations hereunder, the Exchange Offer, the issuance and delivery
by the Company of the Exchange Notes pursuant to the Indenture and
consummation of the Exchange Offer has been duly authorized by all
necessary corporate action on the part of the Company; this Agreement
has been duly executed and delivered by the Company and, assuming due
authorization, execution and delivery by you, is a valid and binding
agreement of the Company;
(iv) The Exchange Agent Agreement and the Information Agent
Agreement have been duly authorized, executed and delivered by the
Company;
(v) The Company is not, or after giving effect to the Exchange
Offer, will not be, and the Company is not directly or indirectly
"controlled" by, an "investment company," as such terms are defined in
the 1940 Act;
(vi) The Registration Statement has been filed under the
Securities Act prior to the Commencement Date and, to such counsel's
knowledge, no refusal order preventing effectiveness, and after
effectiveness, no stop order suspending the effectiveness, of the
Registration Statement has been issued and to such counsel's
knowledge, no proceedings for that purpose have been instituted or are
pending or threatened under the Securities Act;
(vii) The Registration Statement and the Prospectus, and each
amendment or supplement thereto (other than the financial statements,
including supporting schedules, and financial data derived therefrom
as to which such counsel need express no opinion), as of the effective
date of the Registration Statement, complied as to form in all
material respects with the requirements of the Securities Act and the
applicable rules and regulations thereunder;
(viii) The Schedule TO, and each amendment or supplement
thereto, and the documents required by Item 12 thereof (other than the
financial statements, including supporting schedules, and the
financial data derived therefrom as to which such counsel need express
no opinion) comply as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations
thereunder;
(ix) The information in the Prospectus under the captions "The
Exchange Offer," "Description of the Existing Notes,"
-16-
"Description of Exchange Notes" and "Description of the Capital
Stock," insofar as such statements purport to constitute a summary of
the legal matters, documents or proceedings referred to therein,
fairly present the information required to be disclosed under the
Securities Act and the applicable rules and regulations thereunder;
and the statements in the Prospectus under the caption "U.S. Federal
Income Tax Considerations," in so far as they purport to describe the
provisions of the laws referred to therein, fairly summarize such laws
in all material respects.
(x) The description in the Registration Statement and the
Prospectus of the charter and bylaws of the Company and of statutes,
and of the bank facility Agreements are accurate and fairly present
the information required to be presented by the Securities Act and the
applicable rules and regulations thereunder;
(xi) The execution and delivery by the Company of, and the
performance by the Company of it obligations under this Agreement, the
Exchange Offer, the issuance and delivery by the Company of the
Exchange Notes pursuant to the Exchange Offer and consummation of the
Exchange Offer, and the fulfillment of the terms hereof and thereof
will not, to such counsel's knowledge, result in a material breach or
violation of any of the terms and provisions of, or constitute a
default under, any Reviewed Agreements other than the Bank Revolving
Credit and Term Loan Agreements which are covered by the opinion of
Murphy, Sheneman, Julian & Xxxxxx; or any applicable statute, rule or
regulation known to such counsel or, to such counsel's knowledge, any
order, writ or decree of any U.S. federal, California or Delaware
court, government or governmental agency or body having jurisdiction
over the Company or any of its subsidiaries or over any of their
properties or operations; provided, however, that no opinion need be
rendered concerning state securities or Blue Sky laws. For purposes
of counsel's opinion, "Reviewed Agreements" means all agreements that
would be required to be filed as an exhibit to the Company's Annual
Report on Form 10-K if the Company was filing its Form 10-K for its
first complete fiscal year (i.e., only those agreements currently in
effect as such list is certified in writing by the Company to such
counsel);
(xii) No consent, approval, authorization, permit or order of or
qualification with any U.S. federal or California or Delaware court,
government or governmental agency or body having jurisdiction over the
Company or any of its subsidiaries, or over any of their properties or
operations is necessary in connection with the consummation by the
Company of its obligations under this Agreement, the Exchange Offer,
the issuance and delivery of the Exchange Notes pursuant to the
Exchange Offer and the consummation of the Exchange Offer, except such
as have been obtained under the Securities Act or Exchange Act or
-17-
such as may be required under state or other securities or Blue Sky
laws or as contemplated by such agreements;
(xii) The Indenture has been duly authorized, executed and
delivered by the Company and assuming due authorization, execution and
delivery of the Indenture by the Trustee, constitutes a valid and
binding agreement of the Company enforceable in accordance with its
terms; and has been duly qualified under the TIA;
(xiii) The Exchange Notes when executed and authenticated in
accordance with the provisions of the Indenture, assuming due
authorization, execution and delivery of the Indenture by the Trustee,
and delivered in accordance with the terms of the Exchange Offer, will
be entitled to the benefits of the Indenture and will be valid and
binding obligations of the Company enforceable in accordance with
their terms; and the Exchange Notes conform in all material respects
to the description contained in the Registration Statement and
Prospectus;
(xiv) The Shares issuable pursuant to the terms of the Exchange
Notes have been duly authorized and reserved for the issuance and
delivery and when issued in accordance with the terms of the Exchange
Notes, will be validly issued, fully paid and non-assessable, and the
issuance of such Shares is not subject to any preemptive or similar
rights under the Company's certificate of incorporation, by-laws or
applicable law and the Rights, if any, issuable under the Preferred
Shares Rights Agreement have been duly authorized and when, and if,
issued in accordance with the terms of the Preferred Shares Rights
Agreement will be valid and binding obligations of the Company
enforceable in accordance with their terms.
In addition to their opinions set forth above, Wilson, Sonsini,
Xxxxxxxx & Xxxxxx shall provide a statement to the effect that nothing has come
to such counsel's attention that causes it to believe that the Registration
Statement, Prospectus and other Exchange Offer Materials (other than the
financial statements and notes thereto and supporting schedules and other
financial and statistical data derived therefrom, set forth therein or omitted
therefrom, as to which no advice is given), at the time the Registration
Statement was declared effective by the Commission, contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
that the Prospectus and Exchange Offer Materials (other than the financial
statements and notes thereto and supporting schedules and other financial and
statistical data derived therefrom, set forth therein or omitted therefrom, as
to which no advice is given), as of its date and at all times subsequent thereto
up to and on the Closing Date included an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. With respect to such statement,
-18-
such counsel may state that its belief is based upon procedures set forth
therein, but it is without independent check or verification except as specified
therein.
The opinions set forth above that any document [counsel should list
each] is valid, binding or enforceable according to its terms are qualified as
to:
(i) limitations imposed by bankruptcy, insolvency, reorganization,
arrangement, fraudulent conveyance, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors generally;
(ii) rights to indemnification and contribution which may be limited
by applicable law or equitable principles; and
(iii) general principles of equity including without limitation, the
possible unavailability of specific performance or injunctive relief, and
limitations or rights of acceleration, regardless of whether enforceability
is considered in a proceeding at law or in equity.
Moreover, such counsel expresses no opinion as to the validity,
binding effect or enforceability of any provisions of the Indenture purporting
to impose penalties or any increase in interest rate to the extent they
constitute a penalty or are otherwise contrary to public policy.
The foregoing opinions of such counsel shall be limited to the laws of
the United States of America, the State of California, the State of New York
(but only with respect to paragraphs -- and --- above and only insofar as the
opinions set forth therein related to validity, binding effect and
enforceability of the agreements referred to therein) and the General
Corporation Law of the State of Delaware as such laws exist on the date such
opinion is delivered.
(d) You shall have received the opinion of the Vice President -
General Counsel of the Company dated the Closing Date, addressed to you to the
effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation;
(ii) The Company has the corporate power and corporate authority
to own, lease and operate its properties and to conduct its business
as described in the Prospectus;
(iii) The Company is duly qualified to do business as a foreign
corporation and is in good standing in [list each jurisdiction];
(iv) All issued and outstanding shares of capital stock of each
of the Company's significant subsidiaries have been duly authorized
and validly issued
-19-
and are fully paid and nonassessable and, to such counsel's knowledge,
have not been issued in violation of or subject to any preemptive
right, co-sale right, registration right, right of first refusal or
other similar right and, except as disclosed in the Registration
Statement and Exchange Offer Materials, are owned by the Company
directly or indirectly through one or more subsidiaries of the
Company,free and clear of any pledge, lien, security interest,
encumbrance, claim or equitable interest (other than such preemptive
rights or other rights to subscribe for or purchase securities as were
fully complied with or expressly waived or with respect to the
violation of which the right to make a claim is barred by the
applicable statute of limitations.);
(iv) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus as of the dates stated
therein, the issued and outstanding shares of capital stock of the
Company have been duly and validly issued and are fully paid and
nonassessable, and, to such counsel's knowledge, will not have been
issued in violation of or subject to any preemptive right, co-sale
right, registration right, right of first refusal or other similar
right;
(vi) Each of the Incorporated Documents (other than the
financial statements, including supporting schedules, and the
financial data derived therefrom as to which such counsel need express
no opinion) complied when filed pursuant to the Exchange Act and the
applicable rules and regulations of the Commission thereunder as to
form in all material respects with the requirements of the Securities
Act and the rules and regulations and the Exchange Act and the
applicable rules and regulations of the Commission thereunder;
(vii) To such counsel's knowledge, there are no legal or
governmental proceedings pending or threatened against the Company or
any of its subsidiaries of a character required to be disclosed in the
Registration Statement, the Prospectus or any Incorporated Document by
the Securities Act or the rules and regulations thereunder or by the
Exchange Act or the applicable rules and regulations of the Commission
thereunder, other than those described therein;
(viii) To such counsel's knowledge, neither the Company nor any
of its subsidiaries is presently (a) in material violation of its
respective charter or bylaws, or (b) in material breach of any
applicable U.S. federal, California or Delaware statute, rule or
regulation known to such counsel or, to such counsel's knowledge, any
order, writ or decree of any U.S. federal, California or Delaware
court or governmental agency or body having jurisdiction over the
Company or any of its subsidiaries, or over any of their properties or
operations;
(ix) The execution and delivery by the Company of, and the
performance by the Company of it obligations under this Agreement, the
Exchange Offer, the issuance and delivery by the Company of the
Exchange Notes
-20-
pursuant to the Exchange Offer and consummation of the Exchange Offer,
and the fulfillment of the terms hereof and thereof will not, to such
counsel's knowledge, result in any violation of the Company's charter
or bylaws.
In addition to his opinions set forth above, the Vice President - General
Counsel shall provide a statement to the effect that nothing has come to such
counsel's attention that causes it to believe that the Registration Statement,
Prospectus and other Exchange Offer Materials (other than the financial
statements and notes thereto and supporting schedules and other financial and
statistical data derived therefrom, set forth therein or omitted therefrom, as
to which no advice is given), at the time the Registration Statement was
declared effective by the Commission, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, or that the
Prospectus and Exchange Offer Materials (other than the financial statements and
notes thereto and supporting schedules and other financial and statistical data
derived therefrom, set forth therein or omitted therefrom, as to which no advice
is given), as of its date and at all times subsequent thereto up to and on the
Closing Date included an untrue statement of a material fact or omitted to state
a material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading. With respect
to such statement, such counsel may state that its belief is based upon
procedures set forth therein, but it is without independent check or
verification except as specified therein.
(e) You shall have received an opinion substantially in the form below
of foreign counsel satisfactory to you, addressed to you to the effect that:
Each of the Company's subsidiaries has been duly incorporated and
is validly exiting as a corporation in good standing under the laws of
its jurisdiction of incorporation , and has the corporate power to
own, lease and operate its properties and to conduct its business as
described in the Prospectus, and is qualified to do business as a
foreign corporation and is in good standing in each jurisdiction, if
any, in which the ownership and leasing of its properties or the
conduct of its business requires such qualification, except where the
failure to be so qualified or be in good standing would not have a
Material Adverse Effect;
(f) You shall have received an opinion substantially in the form
below of Murphy, Sheneman, Julian & Xxxxxx addressed to you to the effect that:
The execution and delivery by the Company of, and the performance
by the Company of it obligations under this Agreement, the Exchange
Offer, the issuance and delivery by the Company of the Exchange Notes
pursuant to the Exchange Offer and consummation of the Exchange Offer,
and the fulfillment of the terms hereof and thereof will not, to such
counsel's knowledge, result in any violation of the bank facility
Agreement dated as of October 2, 1997
-21-
as amended February 11, 1998, August 10, 1998, September 27, 1999,
December 29, 1999 and February 1, 2000.
Counsel rendering the foregoing opinions may rely as to questions of
law not involving the laws of the United States of America or the State of
California or the State of Delaware upon opinions of local counsel, and as to
questions of fact upon representations or certifications of officers of the
Company, and of government officials, in which case their opinion is to state
that they are so relying and that they have no knowledge of any material
misstatement or inaccuracy in any such opinion, representation or certificate.
Copies of any opinion, representation or certificate so relied upon shall be
delivered to you, as Dealer Manager, and to Dealer Manager's Counsel.
(g) You shall have received on the Closing Date an opinion of Shearman &
Sterling, in form and substance satisfactory to you, with respect to the
sufficiency of all such corporate proceedings and other legal matters relating
to this Agreement and the transactions contemplated hereby as you may reasonably
require, and the Company shall have furnished to such counsel such documents as
they may have requested for the purpose of enabling them to pass upon such
matters.
(h) You shall have received on the Commencement Date and the Closing
Date, letters, dated as of the Commencement Date (or one business day prior
thereto) and Closing Date, as the case may be, from Ernst and Young LLP
addressed to you substantially in the form of that draft letter dated February
, 2000.
-22-
(i) You shall have received a certificate of the Company, dated as of
the Closing Date, signed by the Chief Executive Officer and Chief Financial
Officer of the Company, to the effect that, and you shall be satisfied that:
(i) The representations and warranties of the Company in this
Agreement are true and correct in all material respects, as if made on
and as of the Closing Date or such other date as of which any
representation speaks, as the case may be, and the Company has
complied with all the agreements and satisfied all the conditions on
its part to be performed or satisfied at or prior to the Closing Date,
as the case may be;
(ii) No stop order refusing or suspending the effectiveness of
the Registration Statement has been issued and no proceedings for that
purpose have been instituted or are pending or threatened under the
Securities Act;
(iii) When the Registration Statement became effective and at
all times subsequent thereto up to the date of such certificate, the
Registration Statement and the Prospectus, and any amendments or
supplements thereto, and the Incorporated Documents, when such
Incorporated Documents became effective or were filed with the
Commission, contained all material information required to be included
therein by the Securities Act and the rules and regulations thereunder
or the Exchange Act and the applicable rules and regulations of the
Commission thereunder, as the case may be, and in all material
respects conformed to the requirements of the Securities Act and the
rules and regulations thereunder or the Exchange Act and the
applicable rules and regulations of the Commission thereunder, as the
case may be, the Registration Statement, and any amendment or
supplement thereto, did not and does not include any untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, the Prospectus, and any amendment or supplement thereto,
did not and does not include any untrue statement of a material fact
or omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, and, since the effective date of the Registration
Statement, there has occurred no event required to be set forth in an
amended or supplemented Prospectus which has not been so set forth;
and
(iv) Subsequent to the respective dates as of which information
is given in the Registration Statement and Prospectus and up to the
date of such certificate, and except as disclosed therein, there has
not been (a) any material adverse change in the condition (financial
or otherwise), earnings, operations, business or business prospects of
the Company and its subsidiaries considered as one enterprise, (b) any
transaction that is material to the Company and its subsidiaries
considered as one enterprise, except transactions entered into
-23-
in the ordinary course of business, (c) any obligation, direct or
contingent, that is material to the Company and its subsidiaries
considered as one enterprise, incurred by the Company or its
subsidiaries, except obligations incurred in the ordinary course of
business, (d) any change in the capital stock or outstanding
indebtedness of the Company that is material to the Company and its
subsidiaries considered as one enterprise, (e) any dividend or
distribution of any kind declared, paid or made on the capital stock
of the Company; or (f) any loss or damage (whether or not insured) to
the property of the Company or any of its subsidiaries which has been
sustained or will have been sustained and which has a Material Adverse
Effect or a material adverse effect on the ability of the Company to
perform its obligations under the Exchange Offer or consummate the
Exchange Offer.
(j) The Company shall have furnished to you such further certificates
and documents as you shall reasonably request (including certificates of
officers of the Company) as to the accuracy of the representations and
warranties of the Company herein, as to the performance by the Company of its
obligations hereunder and as to the other conditions concurrent and precedent to
your obligations hereunder.
(k) The Registration Rights Agreement shall be executed and delivered
by the Company on or prior to the Closing Date.
All such opinions, certificates, letters and documents will be in
compliance with the provisions hereof only if they are reasonably satisfactory
to Dealer Manager's Counsel. The Company will furnish you with such number of
conformed copies of such opinions, certificates, letters and documents as you
shall reasonably request.
11 Indemnification and Contribution.
--------------------------------
(a) The Company agrees to indemnify and hold you harmless against any
losses, claims, damages or liabilities, joint or several, to which you may
become subject under the Securities Act, the Exchange Act or otherwise,
specifically including, but not limited to, losses, claims, damages or
liabilities (or actions in respect thereof) arising out of or based upon (i) any
breach of any representation, warranty, agreement or covenant of the Company
herein contained, (ii) any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, the Schedule TO or any
Exchange Offer Materials, or any amendments or supplements thereto, including
any Incorporated Document, or the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, or (iii) any untrue statement or alleged
untrue statement of any material fact contained in any Prospectus or any
amendment or supplement thereto, or the omission or alleged omission to state
therein a material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, and agrees to
reimburse you for any legal or other expenses reasonably incurred by you in
connection with investigating or defending any such loss, claim, damage,
liability or action;
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provided, however, that the Company shall not be liable in any such case to the
extent that any such loss, claim, damage, liability or action arises out of or
is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in the Registration Statement, the Schedule TO, any
Exchange Offer Materials, or the Prospectus, or any such amendment or supplement
thereto, in reliance upon, and in conformity with, written information relating
to you furnished to the Company by you, specifically for use in the preparation
thereof.
The indemnity agreement in this Section 11(a) shall extend upon the
same terms and conditions to, and shall inure to the benefit of, you and your
affiliates and the partners, directors, officers, employees and agents of you
and your affiliates, and each person, if any, who controls you within the
meaning of the Securities Act or the Exchange Act. This indemnity agreement
shall be in addition to any liabilities which the Company may otherwise have.
(b) You agree to indemnify and hold harmless the Company against any
losses, claims, damages or liabilities, joint or several, to which the Company
may become subject under the Securities Act, the Exchange Act or otherwise,
specifically including, but not limited to, losses, claims, damages or
liabilities (or actions in respect thereof) arising out of or based upon (i) any
breach of any representation, warranty, agreement or covenant of yours herein
contained, (ii) any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement, the Schedule TO or any Exchange
Offer Materials, or any amendments or supplements thereto, including any
Incorporated Document, or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or (iii) any untrue statement or alleged untrue
statement of any material fact contained in the Prospectus or any amendment or
supplement thereto, or the omission or alleged omission to state therein a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, in the case of
subparagraphs (ii) and (iii) of this Section 11(b) 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 you specifically for use in the
Registration Statement, the Prospectus, the Schedule TO, any other Exchange
Offer Materials or any amendment or supplement thereto or in the preparation
thereof, and agree to reimburse the Company for any legal or other expenses
reasonably incurred by the Company in connection with investigating or defending
any such loss, claim, damage, liability or action.
The indemnity agreement in this Section 11(b) shall extend upon the
same terms and conditions to, and shall inure to the benefit of, each officer of
the Company who signed the Registration Statement and each director of the
Company, and each person, if any, who controls the Company within the meaning of
the Securities Act or the Exchange Act. This indemnity agreement shall be in
addition to any liabilities which you may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
11 of notice of the commencement of any action, such indemnified party shall, if
a claim in respect
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thereof is to be made against any indemnifying party under this Section 11,
notify the indemnifying party in writing of the commencement thereof but the
omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party otherwise than under this
Section 11. In case any such action is brought against any indemnified party,
and it notified the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent
that it shall elect by written notice delivered to the indemnified party
promptly after receiving the aforesaid notice from such indemnified party, to
assume the defense thereof, with counsel reasonably satisfactory to such
indemnified party; provided, however, that if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, the indemnified
party or parties shall have the right to select separate counsel to assume such
legal defenses and to otherwise participate in the defense of such action on
behalf of such indemnified party or parties. Upon receipt of notice from the
indemnifying party to such indemnified party of the indemnifying party's
election so to assume the defense of such action and approval by the indemnified
party of counsel, the indemnifying party will not be liable to such indemnified
party under this Section 11 for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense thereof unless
(i) the indemnified party shall have employed separate counsel in accordance
with the proviso to the next preceding sentence (it being understood, however,
that the indemnifying party shall not be liable for the expenses of more than
one separate counsel (together with appropriate local counsel) approved by the
indemnifying party representing all the indemnified parties under Section 11(a)
or 11(b) hereof who are parties to such action), (ii) the indemnifying party
shall not have employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
commencement of the action or (iii) the indemnifying party has authorized the
employment of counsel for the indemnified party at the expense of the
indemnifying party. In no event shall any indemnifying party be liable in
respect of any amounts paid in settlement of any action unless the indemnifying
party shall have approved the terms of such settlement; provided that such
consent shall not be unreasonably withheld. 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 indemnification could have been sought hereunder by
such indemnified party, unless such settlement includes an unconditional release
of such indemnified party from all liability on all claims that are the subject
matter of such proceeding.
(d) In order to provide for just and equitable contribution in any
action in which a claim for indemnification is made pursuant to this Section 11
but it is judicially determined (by the entry of a final judgment or decree by a
court of competent jurisdiction and the expiration of time to appeal or the
denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that this Section 11 provides for
indemnification in such case, all the parties hereto shall contribute to the
aggregate losses, claims, damages or liabilities to which they may be subject
(after contribution from others) in such proportion so that you are responsible
for the portion represented by the percentage that the
-26-
maximum Dealer Manager's fee payable to the Dealer Manager pursuant to Section 6
hereof bears to the value of the maximum number of Exchange Notes issuable
pursuant to the Exchange Offer, and the Company is responsible for the remaining
portion, provided, however, that (i) you shall not be required to contribute any
amount in excess of the amount by which the fee paid to you pursuant to Section
6 hereof exceeds the amount of damages which you have been otherwise required to
pay and (ii) no person guilty of a fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who is not guilty of such fraudulent
misrepresentation. The contribution agreement in this Section 11(d) shall extend
upon the same terms and conditions to, and shall inure to the benefit of, each
person, if any, who controls you or the Company within the meaning of the
Securities Act or the Exchange Act and each officer of the Company who signed
the Registration Statement and each director of the Company.
(e) The parties to this Agreement hereby acknowledge that they are
sophisticated business persons who were represented by counsel during the
negotiations regarding the provisions hereof including, without limitation, the
provisions of this Section 11, and are fully informed regarding said provisions.
They further acknowledge that the provisions of this Section 11 fairly allocate
the risks in light of the ability of the parties to investigate the Company and
its business in order to assure that adequate disclosure is made in the
Registration Statement, the Schedule TO, any Exchange Offering Materials and the
Prospectus as required by the Securities Act and the Exchange Act.
12 Representations, Warranties, Covenants and Agreements to Survive
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Delivery. All representations, warranties, covenants and agreements of the
--------
Company and you herein or in certificates delivered pursuant hereto, and the
indemnity and contribution agreements contained in Section 11 hereof shall
remain operative and in full force and effect regardless of any investigation
made by or on behalf of you or any person controlling you within the meaning of
the Securities Act or the Exchange Act, or by or on behalf of the Company or any
of its officers, directors or controlling persons within the meaning of the
Securities Act or the Exchange Act, and shall survive the completion of the
Exchange Offer or termination of this Agreement.
13 Termination. (a) This Agreement shall terminate upon the earliest to
-----------
occur of (i) thirty days after the Expiration Date, (ii) any of the
conditions specified in Section 10 has not been fulfilled as of any date such
condition is required to be fulfilled pursuant to Section 10 (and the Dealer
Manager shall have notified the Company thereof), (iii) the date on which the
Company terminates or withdraws the Exchange Offer for any reason, or (iv) any
modification to the business terms of the Exchange Offer in the Company's sole
and absolute discretion that results in the Dealer Manager withdrawing pursuant
to Section 5 hereof (the earliest to occur of clauses (i), (ii), (iii) or (iv)
being referred to as the "Termination Date").
(b) Notwithstanding termination of this Agreement pursuant to
subsection (a) above, the obligations of the parties pursuant to Sections 6, 7
and 11 shall survive any termination of this Agreement.
If you elect to terminate this Agreement as provided in this Section
13, you shall promptly notify the Company by telephone, telecopy or telegram, in
each case confirmed by letter.
-27-
14 Notices. All notices or communications hereunder, except as herein
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otherwise specifically provided, shall be in writing and if sent to you shall be
mailed, delivered, or telecopied (and confirmed by letter) to you c/o
BancAmerica Xxxxxxxxx Xxxxxxxx, 000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxx
Xxxxxxxxx, Xxxxxxxxxx 00000, telecopier number (000) 000-0000, Attention:
General Counsel; if sent to the Company, such notice shall be mailed, delivered,
telegraphed (and confirmed by letter) or telecopied (and confirmed by letter) to
Read-Rite, Attention: Vice President -- General Counsel, with a copy to Wilson,
Sonsini, Xxxxxxxx & Xxxxxx.
15 Parties. This Agreement shall inure to the benefit of and be binding
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upon the Dealer Manager and the Company and their respective executors,
administrators, successors and assigns. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person or entity, other
than the parties hereto and their respective executors, administrators,
successors and assigns, and the controlling persons within the meaning of the
Securities Act or the Exchange Act, officers and directors referred to in
Section 11 hereof, any legal or equitable right, remedy or claim in respect of
this Agreement or any provisions herein contained, this Agreement and all
conditions and provisions hereof being intended to be and being for the sole and
exclusive benefit of the parties hereto and their respective executors,
administrators, successors and assigns and said controlling persons and said
officers and directors, and for the benefit of no other person or entity. No
Holder of Existing Notes receiving Exchange Notes upon exchange of such Existing
Notes shall be construed a successor or assign by reason merely of such
exchange.
16 Applicable Law. This Agreement shall be governed by, and construed in
--------------
accordance with, the laws of the State of New York.
17 Counterparts. This Agreement may be signed in several counterparts,
------------
each of which will constitute an original.
Please indicate your willingness to act as Dealer Manager on the terms set
forth herein and your acceptance of the foregoing provisions by signing in the
space provided below for that purpose and returning to us a copy of this letter,
whereupon this letter and your acceptance shall constitute a binding agreement
among us.
Very truly yours,
READ-RITE CORPORATION
By
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Name:
Title:
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Accepted as of the date first above written:
FLEETBOSTON XXXXXXXXX XXXXXXXX
By
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Name:
Title:
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