3,000,000 SHARES
MERIX CORPORATION
COMMON STOCK, NO PAR VALUE
UNDERWRITING AGREEMENT
DATED APRIL [17], 2000
April [17], 2000
▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C.
▇▇▇▇▇▇▇ & Company, Inc.
As Representatives of the several Underwriters
c/o Thomas ▇▇▇▇▇▇ Partners LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
INTRODUCTION. Merix Corporation, an Oregon corporation (the
"COMPANY"), proposes to issue and sell to the several underwriters named in
SCHEDULE A hereto (the "UNDERWRITERS"), and Tektronix, Inc., an Oregon
corporation and a shareholder of the Company (the "SELLING SHAREHOLDER"),
proposes to sell to the several Underwriters, an aggregate of 3,000,000
shares of the common stock, no par value per share, of the Company (the "FIRM
SHARES"), of which 2,000,000 shares are to be issued and sold by the Company
and 1,000,000 shares are to be sold by the Selling Shareholder.
The Company also proposes to issue and sell to the several Underwriters, and
the Selling Shareholder also proposes to sell to the several Underwriters,
not more than an additional 450,000 shares of common stock, no par value per
share, of the Company (the "ADDITIONAL SHARES"), of which up to 300,000
shares are to be issued and sold by the Company and up to 150,000 shares are
to be sold by the Selling Shareholder, if and to the extent that you shall
have determined to exercise, on behalf of the Underwriters, the right to
purchase such shares of common stock granted to the Underwriters in Section 3
hereof. The Firm Shares and the Additional Shares are hereinafter
collectively referred to as the "SHARES". The shares of common stock, no par
value per share, of the Company to be outstanding after giving effect to the
sales contemplated hereby are hereinafter referred to as the "COMMON STOCK".
The Company and the Selling Shareholder are hereinafter sometimes
collectively referred to as the "SELLERS". ▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC,
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C. and ▇▇▇▇▇▇▇ & Company, Inc. have agreed to
act as representatives of the several Underwriters (in such capacity, the
"REPRESENTATIVES") in connection with the offering and sale of the Shares.
The Company has filed with the Securities and Exchange
Commission (the "COMMISSION") a registration statement on Form S-3 (File No.
333-32616), including a prospectus, relating to the Shares. The registration
statement as amended at the time it becomes effective, including the
information (if any) deemed to be part of the registration statement at the
time of effectiveness pursuant to Rule 430A under the Securities Act of 1933,
as amended (the "SECURITIES ACT"), and all documents incorporated or deemed
to be incorporated by reference therein is hereinafter referred to as the
"REGISTRATION STATEMENT"; the prospectus in the form first used to confirm
sales of Shares is hereinafter referred to as the "PROSPECTUS". If the
Company has filed a registration statement to register additional shares of
Common Stock pursuant to Rule 462(b) under the Securities Act (the "RULE 462
REGISTRATION STATEMENT"), then any reference herein to the term "REGISTRATION
STATEMENT" shall be deemed to include such Rule 462 Registration Statement.
All
references in this Agreement to the Registration Statement, the Rule 462
Registration Statement, a preliminary prospectus, the Prospectus, or any
amendments or supplements to any of the foregoing, shall include any copy
thereof filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval System ("▇▇▇▇▇").
All references in this Agreement to financial statements
and schedules and other information which is "contained," "included" or
"stated" in the Registration Statement or the Prospectus (and all other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is or is
deemed to be incorporated by reference in the Registration Statement or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement or the Prospectus
shall be deemed to mean and include the filing of any document under the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), which is or
is deemed to be incorporated by reference in the Registration Statement or
the Prospectus, as the case may be.
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company represents and warrants to and agrees with each of the Underwriters
and the Selling Shareholder that:
1.1. EFFECTIVE REGISTRATION STATEMENT. The Registration
Statement has become effective; no stop order suspending the effectiveness of
the Registration Statement is in effect, and no proceedings for such purpose
are pending before or threatened by the Commission.
1.2. CONTENTS OF REGISTRATION STATEMENT. (i) The
Registration Statement, when it became effective, did 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, (ii) the
Registration Statement and the Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects with the
Securities Act and the applicable rules and regulations of the Commission
thereunder and (iii) the Prospectus does 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 necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except that the representations and warranties set
forth in this paragraph do not apply to statements or omissions in the
Registration Statement or the Prospectus based upon information relating to
any Underwriter furnished to the Company in writing by such Underwriter
through you expressly for use therein.
1.3. EXCHANGE ACT COMPLIANCE. The documents incorporated
or deemed to be incorporated by reference in the Prospectus, at the time they
were or hereafter are filed with the Commission, complied and will comply in
all material respects with the requirements of the Securities Exchange Act of
1934, as amended (the "EXCHANGE ACT"), and, when read together with the other
information in the Prospectus, at the time the Registration Statement and any
amendments thereto become effective and at the Closing Date and the Option
Closing Date, as the case may be, will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein
or necessary to make the fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading.
1.4. DUE INCORPORATION. The Company has been duly
incorporated and is validly existing as a corporation under the laws of the
jurisdiction of its incorporation, has the corporate power and authority to
own its property and to conduct its business as described in the Prospectus
and is duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
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leasing of property requires such qualification, except to the extent that
the failure to be so qualified or be in good standing would not have a
material adverse effect on the Company.
1.5. NO SUBSIDIARIES. The Company has no subsidiaries.
1.6. UNDERWRITING AGREEMENT. This Agreement has been duly
authorized, executed and delivered by the Company, and is a valid and binding
agreement 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 bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the
rights and remedies of creditors or by general equitable principles.
1.7. DESCRIPTION OF CAPITAL STOCK. The authorized capital
stock of the Company conforms as to legal matters to the description thereof
contained in the Prospectus.
1.8. AUTHORIZED STOCK. The shares of Common Stock
(including the Shares to be sold by the Selling Shareholder) outstanding
prior to the issuance of the Shares to be sold by the Company have been duly
authorized and are validly issued, fully paid and non-assessable.
1.9. VALIDLY ISSUED SHARES. The Shares to be sold by the
Company have been duly authorized and, when issued and delivered in
accordance with the terms of this Agreement, will be validly issued, fully
paid and non-assessable, and the issuance of such Shares will not be subject
to any preemptive or similar rights.
1.10. NO CONFLICT. The execution and delivery by the
Company of, and the performance by the Company of its obligations under, this
Agreement will not contravene any provision of applicable law or the articles
of incorporation or by-laws of the Company or any agreement or other
instrument binding upon the Company that is material to the Company, or any
judgment, order or decree of any governmental body, agency or court having
jurisdiction over the Company, and no consent, approval, authorization or
order of, or qualification with, any governmental body or agency is required
for the performance by the Company of its obligations under this Agreement,
except such as may be required by the securities or Blue Sky laws of the
various states in connection with the offer and sale of the Shares.
1.11. NO MATERIAL ADVERSE CHANGE. There has not occurred
any material adverse change, or any development involving a prospective
material adverse change, in the condition, financial or otherwise, or in the
earnings, business, operations or prospects of the Company from that set
forth in the Prospectus (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement).
1.12. LEGAL PROCEEDINGS; EXHIBITS. There are no legal or
governmental proceedings pending or threatened to which the Company is a
party or to which any of the properties of the Company is subject that are
required to be described in the Registration Statement or the Prospectus and
are not so described or any statutes, regulations, contracts or other
documents that are required to be described or incorporated by reference in
the Registration Statement or the Prospectus or to be filed or incorporated
by reference as exhibits to the Registration Statement that are not described
or filed or incorporated as required.
1.13. COMPLIANCE WITH SECURITIES ACT. Each preliminary
prospectus filed as part of the registration statement as originally filed or
as part of any amendment thereto, or filed pursuant to Rule 424 under the
Securities Act, complied when so filed in all material respects with the
Securities Act and the applicable rules and regulations of the Commission
thereunder.
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1.14. NOT AN INVESTMENT COMPANY. The Company is not and,
after giving effect to the offering and sale of the Shares and the
application of the proceeds thereof as described in the Prospectus, will not
be an "investment company" as such term is defined in the Investment Company
Act of 1940, as amended.
1.15. COMPLIANCE WITH LAWS. The Company (i) is in
compliance with any and all applicable foreign, federal, state and local laws
and regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("ENVIRONMENTAL LAWS"), (ii) has received all permits, licenses
or other approvals required of the Company under applicable Environmental
Laws to conduct its business and (iii) is in compliance with all terms and
conditions of any such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive required permits,
licenses or other approvals or failure to comply with the terms and
conditions of such permits, licenses or approvals would not, individually or
in the aggregate, have a material adverse effect on the Company.
1.16. NO ENVIRONMENTAL COSTS. There are no costs or
liabilities associated with Environmental Laws (including, without
limitation, any capital or operating expenditures required for clean-up,
closure of properties or compliance with Environmental Laws or any permit,
license or approval, any related constraints on operating activities and any
potential liabilities to third parties) which would, individually or in the
aggregate, have a material adverse effect on the Company.
1.17. NO REGISTRATION RIGHTS. There are no contracts,
agreements or understandings between the Company and any person granting such
person the right to require the Company to file a registration statement
under the Securities Act with respect to any securities of the Company or to
require the Company to include such securities with the Shares registered
pursuant to the Registration Statement, other than the Registration Rights
Agreement, dated as of June 1, 1994 and amended as of April ___, 2000 (the
"REGISTRATION RIGHTS AGREEMENT"), by and among the Company and the Selling
Shareholder as described in the Registration Statement.
1.18. CUBAN BUSINESS STATUTE. The Company has complied
with all provisions of Section 517.075, Florida Statutes relating to doing
business with the Government of Cuba or with any person or affiliate located
in Cuba.
1.19. ABSENCE OF MATERIAL CHARGES. Subsequent to the
respective dates as of which information is given in the Registration
Statement and the Prospectus, (1) the Company has not incurred any material
liability or obligation, direct or contingent, nor entered into any material
transaction not in the ordinary course of business; (2) the Company has not
purchased any of its outstanding capital stock, nor declared, paid or
otherwise made any dividend or distribution of any kind on its capital stock;
and (3) there has not been any material change in the capital stock,
short-term debt or long-term debt of the Company, except in each case as
described in the Prospectus.
1.20. GOOD TITLE TO PROPERTIES. The Company has good and
marketable title in fee simple to all real property and good and marketable
title to all personal property owned by it which is material to the business
of the Company, in each case free and clear of all liens, encumbrances and
defects except such as are described in the Prospectus or such as do not
materially affect the value of such property and do not interfere with the
use made and proposed to be made of such property by the Company; and any
real property and buildings held under lease by the Company are held by it
under valid, subsisting and enforceable leases with such exceptions as are
not material and do not interfere with the use made and proposed to be made
of such property and buildings by the Company.
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1.21. INTELLECTUAL PROPERTY RIGHTS. The Company owns or
possesses, or can acquire on reasonable terms, all material patents, patent
rights, licenses, inventions, copyrights, know-how (including trade secrets
and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks and trade
names currently employed by it in connection with the business now operated
by the Company, and the Company has not received any notice of infringement
of or conflict with asserted rights of others with respect to any of the
foregoing which, individually or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a material adverse affect
on the Company.
1.22. NO LABOR DISPUTES. No material labor dispute with
the employees of the Company exists, or, to the knowledge of the Company, is
imminent; and the Company is not aware of any existing, threatened or
imminent labor disturbance by the employees of any of its principal
suppliers, manufacturers or contractors that could have a material adverse
effect on the Company.
1.23. INSURANCE. The Company is insured by the insurers
of recognized financial responsibility against such losses and risks and in
such amounts as are prudent and customary in the businesses in which they are
engaged; and the Company has no reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary to continue
its business at a cost that would not have a material adverse effect on the
Company.
1.24. GOVERNMENTAL PERMITS. The Company possesses all
certificates, authorizations and permits issued by the appropriate federal,
state or foreign regulatory authorities necessary to conduct its business,
except where the failure to possess such certificates, authorizations and
permits would not, individually or in the aggregate, have a material adverse
effect on the Company. The Company has not received any notice of proceedings
relating to the revocation or modification of any such certificate,
authorization or permit which, individually or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would have a material
adverse effect on the Company.
1.25. ACCOUNTING CONTROLS. The Company maintains a system
of internal accounting controls sufficient to provide reasonable assurance
that (1) transactions are executed in accordance with management's general or
specific authorizations; (2) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (3) access to
assets is permitted only in accordance with management's general or specific
authorization; and (4) the recorded accountability for assets is compared
with the existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
1.26. LISTING OF COMMON STOCK. The Common Stock
(including the Shares) is registered pursuant to Section 12(g) of the
Exchange Act and is listed on the Nasdaq National 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 National Market, nor has the Company received
any notification that the Commission or the National Association of
Securities Dealers, Inc. (the "NASD") is contemplating terminating such
registration or listing.
1.27. YEAR 2000 COMPLIANCE. The Company has reviewed its
operations and that of any third parties with which the Company has a
material relationship to evaluate the extent to which the business or
operations of the Company will be affected by the Year 2000 Problem. As a
result of such review, nothing has caused the Company to believe that the
Year 2000 Problem will have a material adverse effect on the
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Company, or result in any material loss or interference with the Company's
business or operations. The "Year 2000 Problem" as used herein means any
significant risk that computer hardware or software used in the receipt,
transmission, processing, manipulation, storage, retrieval, retransmission or
other utilization of data or in the operation of mechanical or electrical
systems of any kind will not, in the case of dates or time periods occurring
after December 31, 1999, function at least as effectively as in the case of
dates or time periods occurring prior to January 1, 2000.
2. REPRESENTATIONS AND WARRANTIES OF THE SELLING
SHAREHOLDER. The Selling Shareholder represents and warrants to and agrees
with each of the Underwriters that:
2.1. DUE AUTHORIZATION. This Agreement has been duly
authorized, executed and delivered by or on behalf of the Selling Shareholder
and is a valid and binding agreement of the Selling Shareholder, 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 bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting the rights and remedies of creditors or
by general equitable principles.
2.2. SELLING SHAREHOLDER DOCUMENTS. The Custody Agreement
and the Power of Attorney (each as defined below) have been duly authorized,
executed and delivered by the Selling Shareholder and are valid and binding
agreements of the Selling Shareholder enforceable in accordance with their
respective terms, except as rights to indemnification thereunder may be
limited by applicable law and except as the enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting the rights and remedies of creditors or
by general equitable principles.
2.3. NO CONFLICT. The execution and delivery by the
Selling Shareholder of, and the performance by the Selling Shareholder of its
obligations under, this Agreement, the Custody Agreement signed by the
Selling Shareholder and ChaseMellon Shareholder Services, L.L.C., as
Custodian, relating to the deposit of the Shares to be sold by the Selling
Shareholder (the "CUSTODY AGREEMENT") and the Power of Attorney appointing
certain individuals as the Selling Shareholder's attorneys-in-fact to the
extent set forth therein, relating to the transactions contemplated hereby
and by the Registration Statement (the "POWER OF ATTORNEY") will not
contravene any provision of applicable law, or the articles of incorporation
or by-laws of the Selling Shareholder, or any agreement or other instrument
binding upon the Selling Shareholder or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Selling
Shareholder, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for the
performance by the Selling Shareholder of its obligations under this
Agreement, the Custody Agreement or the Power of Attorney, except such as may
be required by the securities or Blue Sky laws of the various states in
connection with the offer and sale of the Shares.
2.4. VALIDLY ISSUED SHARES. The Shares to be sold by the
Selling Shareholder pursuant to this Agreement have been duly authorized and
are validly issued, fully paid and non-assessable.
2.5. GOOD TITLE TO SHARES. The Selling Shareholder has,
and on the Closing Date or the Option Closing Date, as the case may be, will
have, valid title to the Shares to be sold by the Selling Shareholder and the
legal right and power, and all authorization and approval required by law, to
enter into this Agreement, the Custody Agreement and the Power of Attorney
and to sell, transfer and deliver the Shares to be sold by the Selling
Shareholder.
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2.6. DELIVERY OF COMMON SHARES. Delivery of the Shares to
be sold by the Selling Shareholder pursuant to this Agreement will pass title
to such Shares free and clear of any security interests, claims, liens,
equities and other encumbrances.
2.7. NO REGISTRATION RIGHTS. The Selling Shareholder does
not have any registration or other similar rights to have any equity or debt
securities registered for sale by the Company under the Registration
Statement or included in the offering contemplated by this Agreement, other
than the Registration Rights Agreement as described in the Registration
Statement.
2.8. NO PRICE STABILIZATION OR MANIPULATION. The Selling
Shareholder has not taken and will not take, directly or indirectly, any
action designed to or that might be reasonably expected to cause or result in
stabilization or manipulation of the price of the Common Stock to facilitate
the sale or resale of the Shares.
2.9. DISCLOSURE IN REGISTRATION STATEMENT. To the
knowledge of the Selling Shareholder, (i) the Registration Statement, when it
became effective, did 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 and (ii) the Prospectus does not
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, except that the
representations and warranties set forth in this paragraph 2(i) do not apply
to statements or omissions in the Registration Statement or the Prospectus
based upon information relating to any Underwriter furnished to the Company
in writing by such Underwriter through you expressly for use therein. For
purposes of this Section 2.9, knowledge of the Selling Shareholder shall mean
the actual knowledge of the Selling Shareholder's representative on the
Company's Board of Directors.
3. PURCHASE AND SALE AGREEMENTS.
3.1. FIRM SHARES. Each Seller, severally and not jointly,
hereby agrees to sell to the several Underwriters, and each Underwriter, upon
the basis of the representations and warranties herein contained, but subject
to the conditions hereinafter stated, agrees, severally and not jointly, to
purchase from such Seller at $______ a share (the "PURCHASE PRICE") the
number of Firm Shares (subject to such adjustments to eliminate fractional
shares as you may determine) that bears the same proportion to the number of
Firm Shares to be sold by such Seller as the number of Firm Shares set forth
in SCHEDULE A hereto opposite the name of such Underwriter bears to the total
number of Firm Shares.
3.2. ADDITIONAL SHARES. On the basis of the
representations and warranties contained in this Agreement, and subject to
its terms and conditions, the Company agrees to sell to the Underwriters, and
the Underwriters shall have a one-time right to purchase from the Company, up
to 300,000 Additional Shares at the Purchase Price. On the basis of the
representations and warranties contained in this Agreement, and subject to
its terms and conditions, the Selling Shareholder agrees to sell to the
Underwriters, and the Underwriters shall have a one-time right to purchase
from the Selling Shareholder, up to 150,000 Additional Shares at the Purchase
Price. To the extent that the Underwriters purchase less than 450,000
Additional Shares, the Underwriters shall purchase from each of the Company
and the Selling Shareholder a number of Additional Shares equal to the
product of (i) the number of Firm Shares to be sold by the Company or the
Selling Shareholder, as the case may be, pursuant to Section 3.1 divided by
the aggregate number of Firm Shares to be sold by the Company and the Selling
Shareholder pursuant to Section 3.1 multiplied by (ii) the aggregate number
of Additional Shares to be purchased by the Underwriters from the Company and
the Selling Shareholder. If you, on behalf of the Underwriters, elect to
exercise such options, you shall so notify the Company and the Selling
Shareholder in writing not later than thirty (30) days after the date of this
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Agreement, which notice shall specify the number of Additional Shares to be
purchased by the Underwriters from the Company and the Selling Shareholder
and the date on which such shares are to be purchased. Such date may be the
same as the Closing Date (as defined below) but not earlier than the Closing
Date nor later than ten (10) business days after the date of such notice.
Additional Shares may be purchased as provided in Section 4 hereof solely for
the purpose of covering over-allotments made in connection with the offering
of the Firm Shares. If any Additional Shares are to be purchased, each
Underwriter agrees, severally and not jointly, to purchase the number of
Additional Shares (subject to such adjustments to eliminate fractional shares
as you may determine) that bears the same proportion to the total number of
Additional Shares to be purchased as the number of Firm Shares set forth in
SCHEDULE A hereto opposite the name of such Underwriter bears to the total
number of Firm Shares.
3.3. MARKET STANDOFF PROVISION. The Company hereby agrees
that, without the prior written consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC, it
will not, during the period ending 90 days after the date of the Prospectus,
(i) offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase, lend, or otherwise transfer or dispose of, directly or
indirectly, any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock or (ii) enter into any swap or
other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Common Stock, whether any such
transaction described in clause (i) or (ii) above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise. The
foregoing sentence shall not apply to (A) the Shares to be sold hereunder or
(B) the issuance by the Company of stock options under its existing stock
option plans or of shares of Common Stock upon the exercise of options or
warrants or the conversion of a security outstanding on the date hereof of
which the Underwriters have been advised in writing and which is described in
the Prospectus.
3.4. TERMS OF PUBLIC OFFERING. The Sellers are advised by
you that the Underwriters propose to make a public offering of their
respective portions of the Shares as soon after the Registration Statement
and this Agreement have become effective as in your judgment is advisable.
The Sellers are further advised by you that the Shares are to be offered to
the public initially at $_____ a share (the "PUBLIC OFFERING PRICE") and to
certain dealers selected by you at a price that represents a concession not
in excess of $______ a share under the Public Offering Price, and that any
Underwriter may allow, and such dealers may reallow, a concession, not in
excess of $_____ a share, to any Underwriter or to certain other dealers.
4. PAYMENT AND DELIVERY.
4.1. FIRM SHARES. Payment for the Firm Shares to be sold
by each Seller shall be made to such Seller in immediately available funds in
New York City against delivery of such Firm Shares for the respective
accounts of the several Underwriters at 10:00 a.m., New York City time, on
April [21], 2000, or at such other time on the same or such other date, not
later than April [31], 2000, as shall be designated in writing by you. The
time and date of such payment are hereinafter referred to as the "CLOSING
DATE".
4.2. ADDITIONAL SHARES. Payment for any Additional Shares
to be sold by each Seller shall be made to such Seller in immediately
available funds in New York City against delivery of such Additional Shares
for the respective accounts of the several Underwriters at 10:00 a.m., New
York City time, on the date specified in the notice described in Section 3.2
or at such other time on the same or on such other date, in any event not
later than May [26], 2000, as shall be designated in writing by you. The time
and date of such payment are hereinafter referred to as the "OPTION CLOSING
DATE".
4.3. DELIVERY OF CERTIFICATES. Certificates for the Firm
Shares and Additional Shares shall be in definitive form and registered in
such names and in such denominations as you shall request in writing
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not later than one (1) full business day prior to the Closing Date or the
Option Closing Date, as the case may be. The certificates evidencing the Firm
Shares and Additional Shares shall be delivered to you on the Closing Date or
the Option Closing Date, as the case may be, for the respective accounts of
the several Underwriters, with any transfer taxes payable in connection with
the transfer of the Shares to the Underwriters duly paid, against payment of
the Purchase Price therefor.
5. COVENANTS OF THE COMPANY. In further consideration of
the agreements of the Underwriters herein contained, the Company covenants
with each Underwriter as follows:
5.1. FURNISH COPIES OF REGISTRATION STATEMENT AND
PROSPECTUS. To furnish to you, without charge, four signed copies of the
Registration Statement (including exhibits thereto) and for delivery to each
other Underwriter a conformed copy of the Registration Statement (without
exhibits thereto) and to furnish to you in New York City, without charge,
prior to 10:00 a.m. New York City time on the business day next succeeding
the date of this Agreement and during the period mentioned in Section 5.3
below, as many copies of the Prospectus and any supplements and amendments
thereto (including any documents incorporated or deemed incorporated by
reference therein) or to the Registration Statement as you may reasonably
request.
5.2. NOTIFICATION OF AMENDMENTS OR SUPPLEMENTS. Before
amending or supplementing the Registration Statement or the Prospectus
(including any amendment or supplement through incorporation by reference of
any report filed under the Exchange Act), to furnish to you a copy of each
such proposed amendment or supplement and not to file any such proposed
amendment or supplement to which you reasonably object, and to file with the
Commission within the applicable period specified in Rule 424(b) under the
Securities Act any prospectus required to be filed pursuant to such rule.
5.3. FILINGS OF AMENDMENTS OR SUPPLEMENTS. If, during
such period after the first date of the public offering of the Shares as in
the opinion of counsel for the Underwriters the Prospectus is required by law
to be delivered in connection with sales by an Underwriter or dealer (the
"PROSPECTUS DELIVERY PERIOD"), any event shall occur or condition exist as a
result of which it is necessary to amend or supplement the Prospectus in
order to make the statements therein, in the light of the circumstances when
the Prospectus is delivered to a purchaser, not misleading, or if, in the
opinion of counsel for the Underwriters, it is necessary to amend or
supplement the Prospectus to comply with applicable law, forthwith to
prepare, file with the Commission and furnish, at its own expense, to the
Underwriters and to the dealers (whose names and addresses you will furnish
to the Company) to which Shares may have been sold by you on behalf of the
Underwriters and to any other dealers upon request, either amendments or
supplements to the Prospectus so that the statements in the Prospectus as so
amended or supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus, as amended or supplemented, will comply with law.
5.4. BLUE SKY LAWS. To endeavor to qualify the Shares for
offer and sale under the securities or Blue Sky laws of such jurisdictions as
you shall reasonably request.
5.5. EARNINGS STATEMENT. To make generally available to
its securityholders as soon as practicable, but in any event not later than
eighteen (18) months after the effective date of the Registration Statement
(as defined in Rule 158(c) under the Securities Act), an earnings statement
of the Company (which need not be audited) complying with Section 11(a) of
the Securities Act and the rules and regulations thereunder (including, at
the option of the Company, Rule 158).
5.6. USE OF PROCEEDS. The Company shall apply the net
proceeds from the sale of the Shares sold by it in the manner described under
the caption "Use of Proceeds" in the Prospectus.
9
5.7. TRANSFER AGENT. The Company shall maintain, at its
expense, a registrar and transfer agent for the Common Stock.
5.8. PERIODIC REPORTING OBLIGATIONS. During the
Prospectus Delivery Period, the Company shall file, on a timely basis, with
the Commission and the Nasdaq National Market all reports and documents
required to be filed under the Exchange Act.
6. CONDITIONS TO THE UNDERWRITERS' OBLIGATIONS. The
obligations of the Sellers to sell the Shares to the several Underwriters and
the several obligations of the Underwriters to purchase and pay for the
Shares on the Closing Date are subject to the following conditions:
6.1. EFFECTIVE REGISTRATION STATEMENT. The Registration
Statement shall have become effective not later than 4:00 p.m. (New York City
time) on the date hereof.
6.2. RULE 462 REGISTRATION STATEMENT. If the Company
elects to rely upon Rule 462(b), the Company shall file a Rule 462
Registration Statement with the Commission in compliance with Rule 462(b) by
10:00 P.M., Washington, D.C. time, on the date of this Agreement, and the
Company shall at the time of filing either pay to the Commission the filing
fee for the Rule 462 Registration Statement or give irrevocable instructions
for the payment of such fee pursuant to Rule 111(b) under the Securities Act.
6.3. PROSPECTUS FILED WITH COMMISSION. The Company shall
have filed the Prospectus with the Commission (including the information
required by Rule 430A under the Securities Act) in the manner and within the
time period required by Rule 424(b) under the Securities Act; or the Company
shall have filed a post-effective amendment to the Registration Statement
containing the information required by such Rule 430A, and such
post-effective amendment shall have become effective.
6.4. NO STOP ORDER. No stop order suspending the
effectiveness of the Registration Statement, any Rule 462 Registration
Statement, or any post-effective amendment to the Registration Statement,
shall be in effect and no proceedings for such purpose shall have been
instituted or threatened by the Commission.
6.5. NO NASD OBJECTION. The NASD shall have raised no
objection to the fairness and reasonableness of the underwriting terms and
arrangements.
6.6. NO MATERIAL ADVERSE CHANGE. There shall not have
occurred any change, or any development involving a prospective change, in
the condition, financial or otherwise, or in the earnings, business,
operations or prospects of the Company from that set forth in the Prospectus
(exclusive of any amendments or supplements thereto subsequent to the date of
this Agreement) that, in your judgment, is material and adverse and that
makes it, in your judgment, impracticable to market the Shares on the terms
and in the manner contemplated in the Prospectus.
6.7. OFFICER'S CERTIFICATE. The Underwriters shall have
received on the Closing Date a certificate, dated the Closing Date and signed
by the Chief Executive Officer of the Company, (i) to the effect set forth in
Sections 6.4 and 6.6 above, (ii) to the effect that the representations and
warranties of the Company contained in this Agreement are true and correct as
of the Closing Date and that the Company has complied with all of the
agreements and satisfied all of the conditions on its part to be performed or
satisfied hereunder on or before the Closing Date and (iii) as to such other
matters as the Representatives may reasonably request.
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6.8. OPINION OF COMPANY COUNSEL. The Underwriters shall
have received on the Closing Date an opinion of ▇▇▇▇▇▇▇ Coie, LLP, counsel
for the Company, dated the Closing Date, the form of which is attached hereto
as EXHIBIT A. The opinion shall be rendered to the Underwriters and the
Selling Shareholder at the request of the Company and shall so state therein.
6.9. OPINION OF SELLING SHAREHOLDER COUNSEL. The
Underwriters shall have received on the Closing Date an opinion of Stoel
Rives LLP, counsel for the Selling Shareholder, dated the Closing Date, the
form of which is attached hereto as EXHIBIT B. The opinion shall be rendered
to the Underwriters and the Company at the request of the Selling Shareholder
and shall so state therein.
6.10. OPINION OF UNDERWRITERS COUNSEL. The Underwriters
shall have received on the Closing Date an opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇,
counsel for the Underwriters, dated the Closing Date, in form and substance
acceptable to the Underwriters.
6.11. ACCOUNTANT'S COMFORT LETTER. The Underwriters shall
have received, on each of the date hereof and the Closing Date, a letter
dated the date hereof or the Closing Date, as the case may be, in form and
substance satisfactory to the Underwriters, from each of Deloitte & Touche
LLP and PricewaterhouseCoopers LLP, independent public accountants,
containing statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the financial
statements and certain financial information contained in the Registration
Statement and the Prospectus; PROVIDED that the letter delivered on the
Closing Date shall use a "cut-off date" not earlier than the date hereof.
6.12. LOCK-UP AGREEMENTS. The "lock-up" agreements, each
substantially in the form of EXHIBIT C hereto, between you and certain
shareholders, officers and directors of the Company, delivered to you on or
before the date hereof, shall be in full force and effect on the Closing Date.
6.13. SELLING SHAREHOLDER CERTIFICATE. The Underwriters
shall have received on the Closing Date a certificate, dated the Closing Date
and signed by the Attorney-in-Fact of the Selling Shareholder, to the effect
that the representations and warranties of the Selling Shareholder contained
in this Agreement are true and correct as of the Closing Date and that the
Selling Shareholder has complied with all of the agreements and satisfied all
of the conditions on its part to be performed or satisfied hereunder on or
before the Closing Date.
6.14. SELLING SHAREHOLDER DOCUMENTS. On the date hereof,
the Company and the Selling Shareholder shall have furnished for review by
the Representatives copies of the Power of Attorney and Custody Agreement and
such further information, certificates and documents as the Representatives
may reasonably request.
6.15. ADDITIONAL DOCUMENTS. On the Closing Date, the
Representatives and counsel for the Underwriters shall have received such
information, documents and opinions as they may reasonably require for the
purposes of enabling them to pass upon the issuance and sale of the Shares as
contemplated herein, or in order to evidence the accuracy of any of the
representations and warranties, or the satisfaction of any of the conditions
or agreements, herein contained.
The several obligations of the Underwriters to purchase
Additional Shares hereunder are subject to the satisfaction of each of the
above conditions on or prior to the Option Closing Date and to the delivery
to you on the Option Closing Date of such documents as you may reasonably
request with respect to
11
the good standing of the Company, the due authorization and issuance of the
Additional Shares and other matters related to the issuance of the Additional
Shares.
7. EXPENSES. Whether or not the transactions contemplated
in this Agreement are consummated or this Agreement is terminated, the
Company agrees to pay or cause to be paid all expenses incident to the
performance of its obligations under this Agreement, including: (i) the fees,
disbursements and expenses of the Company's counsel, the Company's
accountants in connection with the registration and delivery of the Shares
under the Securities Act and all other fees or expenses in connection with
the preparation and filing of the Registration Statement, any preliminary
prospectus, the Prospectus and amendments and supplements to any of the
foregoing, including all printing costs associated therewith, and the mailing
and delivering of copies thereof to the Underwriters and dealers, in the
quantities hereinabove specified, (ii) all costs and expenses related to the
transfer and delivery to the Underwriters of the Shares to be issued and sold
by the Company under this Agreement, including any transfer or other taxes
payable thereon, (iii) the cost of printing or producing any Blue Sky or
legal investment memorandum in connection with the offer and sale of the
Shares under state securities laws and all expenses in connection with the
qualification of the Shares for offer and sale under state securities laws as
contemplated by Section 5.4 hereof, including filing fees and the reasonable
fees and disbursements of counsel for the Underwriters in connection with
such qualification and in connection with the Blue Sky or legal investment
memorandum, (iv) all filing fees and the reasonable fees and disbursements of
counsel to the Underwriters incurred in connection with the review and
qualification of the offering of the Shares by the NASD, (v) the cost of
printing certificates representing the Shares, (vi) the costs and charges of
any custodian, transfer agent, registrar or depositary, (vii) the costs and
expenses of the Company relating to investor presentations on any "road show"
undertaken in connection with the marketing of the offering of the Shares,
including, without limitation, expenses associated with the production of
road show slides and graphics, fees and expenses of any consultants engaged
in connection with the road show presentations with the prior approval of the
Company, travel and lodging expenses of the representatives and officers of
the Company and any such consultants and the cost of any aircraft chartered
in connection with the road show, (viii) all expenses in connection with any
offer and sale of the Shares outside of the United States, including filing
fees and the reasonable fees and disbursements of counsel for the
Underwriters in connection with offers and sales outside of the United States
and (ix) all other costs and expenses incident to the performance of the
obligations of the Company hereunder for which provision is not otherwise
made in this Section. Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, the Selling
Shareholder agrees to pay or cause to be paid all expenses incident to the
performance of its obligations under this Agreement, including: (i) the fees,
disbursements and expenses of counsel for the Selling Shareholder and (ii)
all costs and expenses related to the transfer and delivery to the
Underwriters of the Shares to be sold by the Selling Shareholder under this
Agreement, including any transfer or other taxes payable thereon and
excluding any custodian fees (which shall be borne by the Company). It is
understood, however, that except as provided in this Section, Section 8
entitled "Indemnity and Contribution", and the last paragraph of Section 11
below, the Underwriters will pay all of their costs and expenses, including
fees and disbursements of their counsel and any advertising expenses
connected with any offers they may make.
The provisions of this Section shall not supersede or
otherwise affect any agreement that the Sellers may otherwise have for the
allocation of such expenses among themselves.
8. INDEMNITY AND CONTRIBUTION.
8.1. INDEMNIFICATION OF THE UNDERWRITERS. The Sellers,
jointly and severally, agree to indemnify and hold harmless each Underwriter
and each person, if any, who controls any Underwriter within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act,
from and against
12
any and all losses, claims, damages and liabilities (including, without
limitation, any legal or other expenses reasonably incurred in connection
with defending or investigating any such action or claim) caused by any
untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement or any amendment thereof, any preliminary
prospectus or the Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto), or caused by any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except (i) insofar as such losses, claims, damages or liabilities are caused
by any such untrue statement or omission or alleged untrue statement or
omission based upon information relating to any Underwriter furnished to the
Company in writing by such Underwriter through you expressly for use therein
and (ii) that with respect to any preliminary prospectus, the foregoing
indemnity agreement shall not inure to the benefit of any Underwriter from
whom the person asserting any loss, claim, damage or liability purchased
Shares, or any person controlling such Underwriter, if copies of the
Prospectus were timely delivered to the Underwriter pursuant to Section 5 and
a copy of the Prospectus (as then amended or supplemented if the Company
shall have furnished any amendments or supplements thereto) was not sent or
given by or on behalf of such Underwriter to such person, if required by law
so to have been delivered, at or prior to the written confirmation of the
sale of the Shares to such person, and if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such loss, claim,
damage, liability or expense. Notwithstanding the foregoing provisions, the
Selling Shareholder shall be liable for indemnification under this Section
8.1 or for any breach of the Selling Shareholder's representations in Section
2.9 only if the Company shall have failed to indemnify the Underwriters in
accordance with this Section 8.1 within 90 days after demand therefor has
been made to the Company by the Underwriters.
8.2. INDEMNIFICATION BY THE UNDERWRITERS. Each
Underwriter agrees, severally and not jointly, to indemnify and hold harmless
the Company, the Selling Shareholder, the directors of the Company, the
officers of the Company who sign the Registration Statement and each person,
if any, who controls the Company or the Selling Shareholder within the
meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement or any amendment
thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or
supplements thereto), or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, but only with reference to information
relating to such Underwriter furnished to the Company in writing by such
Underwriter through you expressly for use in the Registration Statement, any
preliminary prospectus, the Prospectus or any amendments or supplements
thereto. The names of the Underwriters on the front and back cover pages of
the Prospectus and the information contained in the tables and in the
paragraphs entitled "Commissions and Discounts," "Information Regarding
▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC" and "Market Stabilization, Short Positions and
Penalty Bids" in the "Underwriting" section of the Registration Statement and
the Prospectus has been furnished by the Underwriters expressly for use in
the Registration Statement and the Prospectus.
8.3. INDEMNIFICATION PROCEDURES. In case any proceeding
(including any governmental investigation) shall be instituted involving any
person in respect of which indemnity may be sought pursuant to this Section
8, such person (the "INDEMNIFIED PARTY") shall promptly notify the person
against whom such indemnity may be sought (the "INDEMNIFYING PARTY") in
writing and the indemnifying party, upon request of the indemnified party,
shall retain counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnifying party may
designate in such proceeding and shall pay the fees and disbursements of such
counsel related to such proceeding. In any such proceeding, any indemnified
party shall have the right to retain its own counsel, but the fees and
expenses of such counsel shall be at the
13
expense of such indemnified party unless (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such counsel
or (ii) the named parties to any such proceeding (including any impleaded
parties) include both the indemnifying party and the indemnified party and
representation of both parties by the same counsel would be inappropriate due
to actual or potential differing interests between them. It is understood
that the indemnifying party shall not, in respect of the legal expenses of
any indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for (i) the fees and expenses
of more than one separate firm (in addition to any local counsel) for all
Underwriters and all persons, if any, who control any Underwriter within the
meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act, (ii) the fees and expenses of more than one separate firm (in
addition to any local counsel) for the Company, its directors, its officers
who sign the Registration Statement and each person, if any, who controls the
Company within the meaning of either such Section and (iii) the fees and
expenses of more than one separate firm (in addition to any local counsel)
for the Selling Shareholder and all persons, if any, who control the Selling
Shareholder within the meaning of either such Section, and that all such fees
and expenses shall be reimbursed as they are incurred. In the case of any
such separate firm for the Underwriters and such control persons of any
Underwriters, such firm shall be designated in writing by ▇▇▇▇▇▇ ▇▇▇▇▇▇
Partners LLC. In the case of any such separate firm for the Company, and
such directors, officers and control persons of the Company, such firm shall
be designated in writing by the Company. In the case of any such separate
firm for the Selling Shareholder and such control persons of the Selling
Shareholder, such firm shall be designated in writing by the Selling
Shareholder. The indemnifying party shall not be liable for any settlement of
any proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees and
expenses of counsel as contemplated by the second and third sentences of this
paragraph, the indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement. 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.
8.4. CONTRIBUTION AGREEMENT. To the extent the
indemnification provided for in this Section 8 is unavailable to an
indemnified party or insufficient in respect of any losses, claims, damages
or liabilities referred to therein, then each indemnifying party under such
paragraph, in lieu of indemnifying such indemnified party thereunder, shall
contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (i) in such proportion
as is appropriate to reflect the relative benefits received by the
indemnifying party or parties on the one hand and the indemnified party or
parties 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
indemnifying party or parties on the one hand and of the indemnified party or
parties on the other hand in connection with the statements or omissions that
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative benefits received by the
Sellers on the one hand and the Underwriters on the other hand in connection
with the offering of the Shares shall be deemed to be in the same respective
proportions as the net proceeds from the offering of the Shares (before
deducting expenses) received by each Seller and the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table
14
on the cover of the Prospectus, bear to the aggregate Public Offering Price
of the Shares. The relative fault of the Sellers on the one hand and the
Underwriters on the other hand shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Sellers or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct
or prevent such statement or omission. The Underwriters' respective
obligations to contribute pursuant to this Section 8 are several in
proportion to the respective number of Shares they have purchased hereunder,
and not joint.
8.5. CONTRIBUTION AMOUNTS. The Sellers and the
Underwriters agree that it would not be just or equitable if contribution
pursuant to this Section 8 were determined by PRO RATA allocation (even if
the Underwriters were treated as one entity for such purpose) or by any other
method of allocation that does not take account of the equitable
considerations referred to in Section 8.4. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages and liabilities
referred to in the immediately preceding paragraph shall be deemed to
include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8, no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price at which the
Shares underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages that such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The remedies provided for in this Section 8 are
not exclusive and shall not limit any rights or remedies which may otherwise
be available to any indemnified party at law or in equity.
8.6. SURVIVAL OF PROVISIONS. The indemnity and
contribution provisions contained in this Section 8 and the representations,
warranties and other statements of the Company, the Underwriters and the
Selling Shareholder contained in this Agreement shall remain operative and in
full force and effect regardless of (i) any termination of this Agreement,
(ii) any investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter, the Selling Shareholder or any person
controlling the Selling Shareholder, or the Company, its officers or
directors or any person controlling the Company and (iii) acceptance of and
payment for any of the Shares.
8.7. SELLING SHAREHOLDER LIABILITY. Notwithstanding
anything herein to the contrary, the aggregate liability of the Selling
Shareholder for breaches of the representations and warranties under Section
2 and under the indemnity and contribution provisions of this Section 8 shall
not exceed an amount equal to (a) the aggregate public offering price of the
Shares sold by the Selling Shareholder minus (b) the aggregate underwriting
discounts and commissions, as set forth on the front cover page of the
Prospectus, with respect to such Shares. The Company and the Selling
Shareholder may enter into other agreements amongst themselves with respect
to the indemnity and contribution obligations hereunder; PROVIDED, HOWEVER,
that such agreements will not affect the indemnification and contribution
obligations of the Company and the Selling Shareholder to the Underwriters
under this Agreement.
9. EFFECTIVENESS. This Agreement shall become effective
upon the execution and delivery hereof by the parties hereto.
10. TERMINATION. This Agreement shall be subject to
termination by notice given by you to the Company, if (a) after the execution
and delivery of this Agreement and prior to the Closing Date (i) trading
generally shall have been suspended or materially limited on or by, as the
case may be, any of the New York Stock Exchange, the American Stock Exchange,
the National Association of Securities Dealers,
15
Inc., the Chicago Board of Options Exchange, the Chicago Mercantile Exchange
or the Chicago Board of Trade, (ii) trading of any securities of the Company
shall have been suspended on any exchange or in any over-the-counter market,
(iii) a general moratorium on commercial banking activities in New York,
Oregon or California shall have been declared by either federal or New York,
Oregon or California state authorities or (iv) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or
any calamity or crisis that, in your judgment, is material and adverse, or
(v) in the judgment of the Representatives, there shall have occurred any
material adverse change, or any development that could reasonably be expected
to result in a material adverse change, in the condition, financial or
otherwise, or in the earnings, business, operations or prospects, whether or
not arising from transactions in the ordinary course of business, of the
Company and (b) in the case of any of the events specified in clauses
10(a)(i) through 10(a)(v), such event, individually or together with any
other such event, makes it, in your judgment, impracticable to market the
Shares on the terms and in the manner contemplated in the Prospectus.
11. DEFAULTING UNDERWRITERS. If, on the Closing Date or
the Option Closing Date, as the case may be, any one or more of the
Underwriters shall fail or refuse to purchase Shares that it has or they have
agreed to purchase hereunder on such date, and the aggregate number of Shares
which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase is not more than one-tenth of the aggregate number of the
Shares to be purchased on such date, the other Underwriters shall be
obligated severally in the proportions that the number of Firm Shares set
forth opposite their respective names in SCHEDULE A bears to the aggregate
number of Firm Shares set forth opposite the names of all such non-defaulting
Underwriters, or in such other proportions as you may specify, to purchase
the Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase on such date; PROVIDED that in no event shall
the number of Shares that any Underwriter has agreed to purchase pursuant to
this Agreement be increased pursuant to this Section 11 by an amount in
excess of one-ninth of such number of Shares without the written consent of
such Underwriter. If, on the Closing Date, any Underwriter or Underwriters
shall fail or refuse to purchase Firm Shares and the aggregate number of Firm
Shares with respect to which such default occurs is more than one-tenth of
the aggregate number of Firm Shares to be purchased, and arrangements
satisfactory to you, the Company and the Selling Shareholder for the purchase
of such Firm Shares are not made within 36 hours after such default, this
Agreement shall terminate without liability on the part of any non-defaulting
Underwriter, the Company or the Selling Shareholder. In any such case either
you or the Sellers shall have the right to postpone the Closing Date, but in
no event for longer than seven (7) days, in order that the required changes,
if any, in the Registration Statement and in the Prospectus or in any other
documents or arrangements may be effected. If, on the Option Closing Date,
any Underwriter or Underwriters shall fail or refuse to purchase Additional
Shares and the aggregate number of Additional Shares with respect to which
such default occurs is more than one-tenth of the aggregate number of
Additional Shares to be purchased, the non-defaulting Underwriters shall have
the option to (i) terminate their obligation hereunder to purchase Additional
Shares or (ii) purchase not less than the number of Additional Shares that
such non-defaulting Underwriters would have been obligated to purchase in the
absence of such default. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default
of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters,
or any of them, because of any failure or refusal on the part of any Seller
to comply with the terms or to fulfill any of the conditions of this
Agreement, or if for any reason any Seller shall be unable to perform its
obligations under this Agreement, the Seller which so fails or refuses to
comply or is so unable to perform will reimburse the Underwriters or such
Underwriters as have so terminated this Agreement with respect to themselves,
severally, for all out-of-pocket expenses (including the fees and
disbursements of their counsel) reasonably incurred by such Underwriters in
connection with this Agreement or the offering contemplated hereunder.
16
12. COUNTERPARTS. This Agreement may be signed in
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
13. HEADINGS; TABLE OF CONTENTS. The headings of the
sections of this Agreement and the table of contents have been inserted for
convenience of reference only and shall not be deemed a part of this
Agreement.
14. NOTICES. All communications hereunder shall be in
writing and shall be mailed, hand delivered or telecopied and confirmed to
the parties hereto as follows:
If to the Representatives:
▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
with a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
If to the Company:
Merix Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ Coie, LLP
▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
If to the Selling Shareholder:
Tektronix, Inc.
▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
17
with a copy to:
Stoel Rives LLP
▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, Esq.
Any party hereto may change the address for receipt of communications by
giving written notice to the others.
15. SUCCESSORS. This Agreement will inure to the benefit
of and be binding upon the parties hereto, including any substitute
Underwriters pursuant to Section 11 hereof, and to the benefit of the
officers and directors and controlling persons referred to in Section 8, and
in each case their respective successors, and no other person will have any
right or obligation hereunder. The term "successors" shall not include any
purchaser of the Shares as such from any of the Underwriters merely by reason
of such purchase.
16. PARTIAL UNENFORCEABILITY. The invalidity or
unenforceability of any Section, paragraph or provision of this Agreement
shall not affect the validity or enforceability of any other Section,
paragraph or provision hereof. If any Section, paragraph or provision of this
Agreement is for any reason determined to be invalid or unenforceable, there
shall be deemed to be made such minor changes (and only such minor changes)
as are necessary to make it valid and enforceable.
17. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE.
18. CONSENT TO JURISDICTION. Any legal suit, action or
proceeding arising out of or based upon this Agreement or the transactions
contemplated hereby ("RELATED PROCEEDINGS") may be instituted in the federal
courts of the United States of America located in the City and County of San
Francisco or the courts of the State of California in each case located in
the City and County of San Francisco (collectively, the "SPECIFIED COURTS"),
and each party irrevocably submits to the jurisdiction (except for
proceedings instituted in regard to the enforcement of a judgment of any such
court (a "RELATED JUDGMENT"), as to which such jurisdiction is non-exclusive)
of such courts in any such suit, action or proceeding. Service of any
process, summons, notice or document by mail to such party's address set
forth above shall be effective service of process for any suit, action or
other proceeding brought in any such court. The parties irrevocably and
unconditionally waive any objection to the laying of venue of any suit,
action or other proceeding in the Specified Courts and irrevocably and
unconditionally waive and agree not to plead or claim in any such court that
any such suit, action or other proceeding brought in any such court has been
brought in an inconvenient forum.
19. FAILURE OF THE SELLING SHAREHOLDER TO SELL AND DELIVER
SHARES. If the Selling Shareholder shall fail to sell and deliver to the
Underwriters the Shares to be sold and delivered by the Selling Shareholder
at the Closing Date pursuant to this Agreement, then the Underwriters may at
their option, by written notice from the Representatives to the Company and
the Selling Shareholder, either (i) terminate this Agreement without any
liability on the part of any Underwriter or, except as provided in Sections 7
and 8 hereof, the Company or the Selling Shareholder, or (ii) purchase the
shares which the Company has agreed to sell and deliver in accordance with
the terms hereof. If the Selling Shareholder shall fail to sell and deliver
to the Underwriters the Shares to be sold and delivered by the Selling
Shareholder pursuant to this Agreement at
18
the Closing Date or the Option Closing Date, then the Underwriters shall have
the right, by written notice from the Representatives to the Company and the
Selling Shareholder, to postpone the Closing Date or the Option Closing Date,
as the case may be, but in no event for longer than seven (7) days in order
that the required changes, if any, to the Registration Statement and the
Prospectus or any other documents or arrangements may be effected.
20. ENTIRE AGREEMENT. This Agreement constitutes the
entire agreement of the parties to this Agreement and supersedes all prior
written or oral and all contemporaneous oral agreements, understandings and
negotiations with respect to the subject matter hereof.
21. AMENDMENTS. This Agreement may only be amended or
modified in writing, signed by all of the parties hereto, and no condition
herein (express or implied) may be waived unless waived in writing by each
party whom the condition is meant to benefit.
[Remainder of page intentionally left blank]
19
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to the Company the enclosed copies hereof,
whereupon this instrument, along with all counterparts hereof, shall become a
binding agreement in accordance with its terms.
Very truly yours,
MERIX CORPORATION
By:
-----------------------------------
Name:
Title:
TEKTRONIX, INC.
By:
-----------------------------------
Attorney-in-Fact
Accepted as of the date hereof
▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C.
▇▇▇▇▇▇▇ & Company, Inc.
Acting severally on behalf
of themselves and the
several Underwriters named
in Schedule A hereto.
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC
By:
--------------------------------
Name:
Title:
20
SCHEDULE A
UNDERWRITER NUMBER OF FIRM SHARES
TO BE PURCHASED
▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C.
▇▇▇▇▇▇▇ & Company, Inc.
Total 3,000,000
=========
EXHIBIT A
FORM OF LEGAL OPINION OF COMPANY COUNSEL
1. The Company has been duly incorporated and is validly existing
as a corporation under the laws of the State of Oregon, has the corporate
power and authority to own its property and to conduct its business as
described in the Prospectus and is duly qualified to transact business and is
in good standing in each jurisdiction in which the conduct of its business or
its ownership or leasing of property requires such qualification, except to
the extent that the failure to be so qualified or be in good standing would
not have a material adverse effect on the Company.
2. The Company has no subsidiaries.
3. The authorized capital stock of the Company conforms in all
material respects to the description thereof contained, or incorporated by
reference, in the Prospectus.
4. The shares of Common Stock (including the Shares to be sold by
the Selling Shareholder) outstanding prior to the issuance of the Shares to
be sold by the Company have been duly authorized and are validly issued,
fully paid and non-assessable.
5. The Shares to be sold by the Company have been duly authorized
and, when issued and delivered in accordance with the terms of the
Underwriting Agreement, will be validly issued, fully paid and
non-assessable, and the shareholders of the Company have no preemptive or
similar rights with respect to the Shares under (a) the Company's Articles of
Incorporation or Bylaws, (b) any statute or regulation of the State of Oregon
or (c) any agreement filed, or incorporated by reference, as an exhibit to
the Registration Statement or, to the best of our knowledge, any other
agreement.
6. The Underwriting Agreement has been duly authorized, executed
and delivered by the Company.
7. The execution and delivery by the Company of, and the
performance by the Company of its obligations under, the Underwriting
Agreement will not result in a breach of or constitute a default under (with
or without notice or the passage of time) any provision of applicable law or
the articles of incorporation or by-laws of the Company or, to the best of
such counsel's knowledge, any agreement or other instrument binding upon the
Company that is material to the Company, or, to the best of such counsel's
knowledge, any judgment, order or decree of any governmental body, agency or
court having jurisdiction over the Company, and no consent, approval,
authorization or order of, or qualification with, any governmental body or
agency is required for the performance by the Company of its obligations
under this Agreement, except such as may be required by the securities or
Blue Sky laws of the various states in connection with the offer and sale of
the Shares.
8. The statements (A) contained or incorporated in the Prospectus
under the captions "Description of Capital Stock" and "Underwriting" and (B)
in the Registration Statement in Items 14 and 15, in each case insofar as
such statements constitute summaries of the legal matters, documents or
proceedings referred to therein, fairly present the information called for
with respect to such legal matters, documents and proceedings and fairly
summarize the matters referred to therein.
9. To such counsel's knowledge, there are no legal or governmental
proceedings pending or threatened to which the Company is a party or to which
any of the properties of the Company is subject that are required to be
described in the Registration Statement or the Prospectus and are not so
described or of any statutes, regulations, contracts or other documents that
are required to be described or incorporated by reference in the Registration
Statement or the Prospectus or to be filed or incorporated by reference as
exhibits to the Registration Statement that are not described or filed or
incorporated as required.
10. The Company is not and, after giving effect to the offering and
sale of the Shares and the application of the proceeds thereof as described
in the Prospectus, will not be required to register as an "investment
company" under the Investment Company Act of 1940, as amended.
11. Nothing has caused such counsel to believe that any document
filed by the company pursuant to the Exchange Act, when it was so filed,
contained an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made when such documents where
filed, not misleading.
13. Such counsel is of the opinion that the Registration Statement
and Prospectus (except for financial statements and schedules and other
financial and statistical data included therein as to which such counsel need
not express any opinion) comply as to form in all material respects with the
Securities Act and the applicable rules and regulations of the Commission
thereunder. Although such counsel assumes no responsibility for the factual
accuracy, completeness or fairness of the statement contained in the
Registration Statement or the Prospectus, and on the basis of the procedures
undertaken by such counsel (and relying as to materiality to the extent such
counsel deems appropriate upon the opinions of officers and other
representatives of the Company), no facts have come to the attention of such
counsel that cause it to believe that (except for financial statements and
schedules and other financial and statistical data as to which such counsel
need not express any belief) (A) the Registration Statement and the
prospectus included therein at the time the Registration Statement became
effective 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 (B) the Prospectus contains any untrue
statement of a material fact or omits 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 paragraph 13 of EXHIBIT A, such counsel may state
that their opinion and belief are based upon their participation in the
preparation of the Registration Statement and Prospectus and any amendments
or supplements thereto and review and discussion of the contents thereof, but
are without independent check or verification, except as specified.
EXHIBIT B
FORM OF LEGAL OPINION OF SELLING SHAREHOLDER COUNSEL
1. The Underwriting Agreement has been duly authorized, executed
and delivered by or on behalf of the Selling Shareholder.
2. The execution and delivery by the Selling Shareholder of, and
the performance by the Selling Shareholder of its obligations under, the
Underwriting Agreement, the Custody Agreement and the Power of Attorney will
not contravene any provision of applicable law, or the articles of
incorporation or by-laws of the Selling Shareholder or, to such counsel's
knowledge, any agreement or other instrument binding upon the Selling
Shareholder or, to such counsel's knowledge, any judgment, order or decree of
any governmental body, agency or court having jurisdiction over the Selling
Shareholder, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for the
performance by the Selling Shareholder of its obligations under the
Underwriting Agreement, the Custody Agreement or the Power of Attorney,
except such as may be required by the securities or Blue Sky laws of the
various states in connection with offer and sale of the Shares.
3. The Selling Shareholder has valid title to the Shares to be sold
by the Selling Shareholder and the legal right and power, and all
authorization and approval required by law, to enter into the Underwriting
Agreement, the Custody Agreement and the Power of Attorney and to sell,
transfer and deliver the Shares to be sold by the Selling Shareholder.
4. The Custody Agreement and the Power of Attorney have been duly
authorized, executed and delivered by the Selling Shareholder and are valid
and binding agreements of the Selling Shareholder.
5. Delivery of the Shares to be sold by the Selling Shareholder
pursuant to this Agreement will pass title to such Shares free and clear of
any security interests, claims, liens, equities and other encumbrances.
Such counsel may rely with respect to factual matters and to the
extent such counsel deems appropriate, upon the representations of the
Selling Shareholder contained in the Underwriting Agreement, the Custody
Agreement and the Power of Attorney and in other documents and instruments;
PROVIDED that copies of the Custody Agreement and Power of Attorney and of
any such other documents and instruments shall be delivered to counsel to the
Underwriters and shall be in form and substance satisfactory to counsel to
the Underwriters.
EXHIBIT C
FORM OF LOCK-UP AGREEMENT
March 15, 2000
▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC
▇▇▇▇▇▇▇ & Company, Inc.
As Representatives of the several Underwriters
c/o Thomas ▇▇▇▇▇▇ Partners LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Lock-Up Agreement (the "Agreement")
Ladies and Gentlemen:
The undersigned is (i) an officer and/or director of Merix
Corporation, an Oregon corporation (the "Company"), and/or (ii) an owner of
record or beneficially of shares of the Company's common stock, no par value
per share (the "Common Stock"), or securities convertible into or
exchangeable or exercisable for Common Stock. The undersigned understands
that you, as representatives (the "Representatives"), propose to enter into
an Underwriting Agreement on behalf of the several Underwriters named in
Schedule A to such agreement (collectively, the "Underwriters"), with the
Company and Tektronix, Inc., an Oregon corporation ("Tektronix"), providing
for a public offering of the Common Stock of the Company pursuant to a
Registration Statement on Form S-3 to be filed with the Securities and
Exchange Commission (the "Public Offering"). The undersigned recognizes that
the Public Offering will be of benefit to the undersigned and will benefit
the Company by, among other things, raising additional capital for its
operations. The undersigned acknowledges that you and the other Underwriters
are relying on the representations and agreements of the undersigned
contained in this letter in carrying out the Public Offering and in entering
into underwriting arrangements with the Company and Tektronix with respect to
the Public Offering.
To induce the Underwriters that may participate in the Public
Offering to continue their efforts in connection with the Public Offering,
the undersigned hereby agrees that, without the prior written consent of
▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC (which consent may be withheld in its sole
discretion), it will not, during the period commencing on the date hereof and
ending 90 days after the date of the final prospectus relating to the Public
Offering (the "Prospectus"), (i) offer, pledge, sell, contract to sell, sell
any option or contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase, lend, or otherwise transfer
or dispose of, directly or indirectly, any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock
or (ii) enter into any swap or other arrangement that transfers to another,
in whole or in part, any of the economic consequences of ownership of the
Common Stock, whether any such transaction described in clause (i) or (ii)
above is to be settled by delivery of Common Stock or such other securities,
in cash or otherwise. In addition, the undersigned agrees that, without the
prior written consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC (which consent may be
withheld in its sole discretion), it will not, during the period commencing
on the date hereof and ending 90 days after the date of the Prospectus, make
any demand for or exercise any right with respect to, the
registration of any shares of Common Stock or any security convertible into
or exercisable or exchangeable for Common Stock. With respect to the Public
Offering, the undersigned waives any registration rights relating to
registration under the Securities Act of any Common Stock owned either of
record or beneficially by the undersigned, including any rights to receive
notice of the Public Offering.
The foregoing restrictions are expressly agreed to preclude the
undersigned from engaging in any hedging or other transaction which is
designed to or reasonably expected to lead to or result in a sale or
disposition of the Common Stock even if such Common Stock would be disposed
of by someone other than the undersigned. Such prohibited hedging or other
transactions would include without limitation any short sale or any purchase,
sale or grant of any right (including without limitation any put option or
put equivalent position or call option or call equivalent position) with
respect to any of the Common Stock or with respect to any security that
includes, relates to, or derives any significant part of its value from such
Common Stock.
Notwithstanding the foregoing, the undersigned may transfer shares
of Common Stock (i) as a bona fide gift or gifts, provided that the donee or
donees thereof agree to be bound by the restrictions set forth herein, (ii)
to any trust for the direct or indirect benefit of the undersigned or the
immediate family of the undersigned, provided that the trustee of the trust
agrees to be bound by the restrictions set forth herein, and provided further
that any such transfer shall not involve a disposition for value and (iii) to
the Underwriters pursuant to the Underwriting Agreement. For purposes of this
Agreement, "immediate family" shall mean any relationship by blood, marriage
or adoption, not more remote than first cousin.
The undersigned understands that whether or not the Public Offering
actually occurs depends on a number of factors, including stock market
conditions. The Public Offering will only be made pursuant to an Underwriting
Agreement, the terms of which are subject to negotiation among the Company
and the Underwriters.
The undersigned agrees and consents to the entry of stop transfer
instructions with the Company's transfer agent and registrar against the
transfer of shares of Common Stock or securities convertible into or
exchangeable or exercisable for Common Stock held by the undersigned except
in compliance with the foregoing restrictions.
This agreement is irrevocable and will be binding on the undersigned
and the respective successors, heirs, personal representatives, and assigns
of the undersigned.
Very truly yours,