1
EXHIBIT 1.01
5,500,000 SHARES
FLEXTRONICS INTERNATIONAL LTD.
ORDINARY SHARES
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UNDERWRITING AGREEMENT
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June 20, ▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ SECURITIES LLC
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇ PARTNERS LLC
▇▇▇▇▇▇ BROTHERS INC.
As Representatives of the Several Underwriters
c/o Banc of America Securities LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
1. Introductory. Flextronics International Ltd., a Singapore
company (the "Company"), proposes to issue and sell to you and to the several
underwriters named in Schedule A (the "Underwriters") 5,500,000 shares of its
authorized but unissued Ordinary Shares S$.01 par value each in the capital of
the Company (the "Ordinary Shares"). The 5,500,000 shares to be sold by the
Company are referred to as the "Firm Common Shares." In addition, the Company
has granted to the Underwriters an option to purchase up to an additional
825,000 Ordinary Shares (the "Optional Common Shares") as provided in Section
4(b). The Firm Common Shares and the Optional Common Shares are collectively
referred to as the "Common Shares." Banc of America Securities LLC, ▇▇▇▇▇▇▇
▇▇▇▇▇ Barney Inc., ▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC and ▇▇▇▇▇▇ Brothers 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 Common
Shares.
The Company hereby confirms its agreement with respect to your
purchase of the Common Shares as follows:
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2. Representations and Warranties of the Company. The Company
hereby represents, warrants and covenants to you (the "Underwriter") as follows:
(a) The Company has prepared and filed with the Securities and
Exchange Commission (the "Commission"), in conformity with the
Securities Act of 1933, as amended (the "Act"), and the rules and
regulations (the "Rules and Regulations") thereunder, a Registration
Statement on Form S-3 (File No. 333-87139), including a prospectus
relating to the registration of the Common Shares (as amended to the
date hereof, the "Registration Statement"). The Registration Statement
has been declared effective by the Commission under the Securities Act.
The Company has also filed with, or shall promptly hereafter file with
the Commission, a final prospectus supplement specifically relating to
the Common Shares pursuant to Rule 424(b). The prospectus included in
the Registration Statement is hereinafter referred to as the "Basic
Prospectus." The term "Prospectus" means the Basic Prospectus together
with the final prospectus supplement specifically relating to the Common
Shares. As used herein, the terms "Registration Statement," "Basic
Prospectus," and "Prospectus" shall include in each case the material,
if any, incorporated by reference therein or deemed incorporated by
reference therein pursuant to the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder
(collectively, the "Exchange Act"). There have been delivered to you
four signed copies of the Registration Statement and all amendments and
supplements thereto, together with four copies of each exhibit filed
therewith.
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 Exchange Act which is or is deemed to be incorporated
by reference in the Registration Statement or the Prospectus, as the
case may be.
(b) The Commission has not issued any order preventing or
suspending the use of the Basic Prospectus, and the Basic Prospectus has
conformed in all material respects to the requirements of the Act and
the Rules and Regulations and, as of its date, has not included any
untrue statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and at the
time the Registration Statement became effective, and at all times
subsequent thereto up to and including each Closing
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Date hereinafter mentioned, the Registration Statement and the
Prospectus, and any amendments or supplements thereto, will contain all
material statements and information required to be included therein by
the Act and the Rules and Regulations, and will in all material respects
conform to the requirements of the Act and the Rules and Regulations,
and neither the Registration Statement nor the Prospectus, nor any
amendment or supplement thereto, will 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;
provided, however, no representation or warranty contained in this
subsection 2(b) shall be applicable to information contained in or
omitted from the Registration Statement, the Prospectus or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by or on behalf of the
Underwriters, directly or through the Representatives, specifically for
use in the preparation thereof. Each preliminary prospectus and the
Prospectus filed with the Commission by electronic submission was
identical to the copy thereof delivered to the Underwriters for use in
connection with the offer and sale of the Common Shares.
(c) The Company does not own or control, directly or indirectly,
any material corporation, association or other entity other than the
subsidiaries listed in Exhibit 21.1 to the Company's Annual Report on
Form 10-K for the Company's fiscal year ended March 31, 2000. The
Company has been duly incorporated and is validly existing as a public
company under the laws of Singapore. Each of the subsidiaries of the
Company has been duly incorporated and is validly existing in its
jurisdiction of incorporation or formation. The Company and each of its
subsidiaries has full power and authority (corporate and other) to own
and lease their respective properties and conduct their respective
businesses; except as disclosed in the Registration Statement, the
Company owns all of the outstanding capital stock or joint venture
interests of its subsidiaries, free and clear of all claims, liens,
charges and encumbrances; the Company and each of its subsidiaries are
in possession of and operating in compliance with all authorizations,
licenses, permits, consents, certificates and orders material to the
conduct of their respective businesses, all of which are valid and in
full force and effect; the Company and each of its subsidiaries are duly
qualified to do business and are in good standing as foreign
corporations in each jurisdiction in which the ownership or leasing of
properties or the conduct of their respective businesses requires such
qualification, except for jurisdictions in which the failure to so
qualify would not have a material adverse effect upon the Company or the
subsidiary; and no proceedings have been instituted in any such
jurisdiction, revoking, limiting or curtailing, or seeking to revoke,
limit or curtail, such power and authority or qualification.
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(d) The Company has an authorized share capital as set forth
under the heading "Capitalization" in the Prospectus and issued share
capital as of March 31, 2000, as set forth under the heading
"Capitalization" in the Prospectus; the issued and outstanding Ordinary
Shares have been duly authorized and validly issued, are fully paid,
have been issued in compliance with all federal and state securities
laws, whether of Singapore, the United States or otherwise, were not
issued in violation of or subject to any preemptive rights or other
rights to subscribe for or purchase securities, and conform to the
description thereof contained in the Prospectus. All issued and
outstanding shares of capital stock of each subsidiary of the Company
have been duly authorized and validly issued and are fully paid and
nonassessable. Except as disclosed in the Prospectus and the financial
statements of the Company, and the related notes thereto, included in
the Prospectus, neither the Company nor any subsidiary has outstanding
any options to purchase, or any preemptive rights or other rights to
subscribe for or to purchase, any securities or obligations convertible
into, or any contracts or commitments to issue or sell, shares of its
capital stock or any such options, rights, convertible securities or
obligations (except for options granted pursuant to plans described in
the Prospectus subsequent to the date of information set forth in the
Prospectus). The description of the Company's stock option, stock bonus
and other stock schemes, plans or arrangements, and the options or other
rights granted and exercised thereunder, set forth in the Prospectus
accurately and fairly presents the information required to be shown with
respect to such schemes, plans, arrangements, options and rights.
(e) The Common Shares to be purchased by the Underwriters from
the Company have been duly authorized and, when issued, delivered and
paid for in the manner set forth in this Agreement, will be duly
authorized, validly issued and fully paid, and will conform to the
description thereof contained in the Prospectus. No preemptive rights or
other rights to subscribe for or purchase exist with respect to the
issuance and sale of the Common Shares by the Company pursuant to this
Agreement. No shareholder of the Company has any right which has not
been waived to require the Company to register the sale of any shares
owned by such shareholder under the Act in the public offering
contemplated by this Agreement. No further approval or authority of the
shareholders or the Board of Directors of the Company will be required
for the issuance and sale of the Common Shares to be sold by the Company
as contemplated herein other than the Board of Directors' approval of
the list of purchasers of the Common Shares, which will occur prior to
the Closing.
(f) The Company has full legal right, power and authority to
enter into this Agreement and perform the transactions contemplated
hereby. This Agreement has been duly authorized, executed and delivered
by the Company and constitutes a valid
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and binding obligation of the Company in accordance with its terms. The
making and performance of this Agreement by the Company and the
consummation of the transactions herein contemplated will not violate
any provisions of the Memorandum and Articles of Association,
Certificate of Incorporation, or other organizational documents, of the
Company or any of its subsidiaries, and will not conflict with, result
in the breach or violation of, or constitute, either by itself or upon
notice or the passage of time or both, a default under any agreement,
mortgage, deed of trust, lease, franchise, license, indenture, permit or
other instrument to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries or any of its
respective properties may be bound or affected (except as to conflicts,
breaches, violations or defaults of any of the foregoing that
individually or in the aggregate would not be material to the Company),
any statute or any authorization, judgment, decree, order, rule or
regulation of any court or any regulatory body, administrative agency or
other governmental body applicable to the Company or any of its
subsidiaries or any of their respective properties. No consent,
approval, authorization or other order of any court, regulatory body,
administrative agency or other governmental body is required for the
execution and delivery of this Agreement or the consummation of the
transactions contemplated by this Agreement, except for compliance with
the Act, the Blue Sky laws applicable to the public offering of the
Common Shares by the Underwriters and, if applicable, the clearance of
such offering with the National Association of Securities Dealers, Inc.
(the "NASD").
(g) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, who have expressed their opinion with
respect to the consolidated financial statements and schedules filed
with the Commission as a part of the Registration Statement and included
in the Prospectus and in the Registration Statement, and Deloitte &
Touche and PricewaterhouseCoopers, who have expressed their opinion
with respect to the consolidated financial statements and schedules
referred to in the Registration Statement and Prospectus are independent
accountants as required by the Act, the Rules and Regulations and the
Exchange Act.
(h) The consolidated financial statements and schedules of the
Company and its subsidiaries, and the related notes thereto, included in
each Registration Statement and the Prospectus present fairly the
consolidated financial position of the Company and its subsidiaries as
of the respective dates of such financial statements and schedules, and
the results of operations and changes in financial position of the
Company and its subsidiaries for the respective periods covered thereby.
Such statements, schedules and related notes have been prepared in
accordance with generally accepted accounting principles applied on a
consistent basis as certified by the independent accountants named in
subsection 2(g). No other financial statements or schedules are required
to be included in the Registration Statement. The selected financial
data set
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forth in the Prospectus under the captions "Prospectus Supplement
Summary--Summary Supplemental Consolidated Financial Information,"
"Capitalization" and "Selected Supplemental Consolidated Financial Data"
fairly present the information set forth therein on the basis stated in
the Registration Statement.
(i) Except as disclosed in the Prospectus, and except as to
defaults which individually or in the aggregate would not be material to
the Company, neither the Company nor any of its subsidiaries is in
violation or default of any provision of its Memorandum and Articles of
Association, Certificate of Incorporation, or other organizational
documents, or is in breach of or default with respect to any provision
of any agreement, judgment, decree, order, mortgage, deed of trust,
lease, franchise, license, indenture, permit or other instrument to
which it is a party or by which it or any of its properties are bound;
and there does not exist any state of facts which constitutes an event
of default on the part of the Company or any such subsidiary as defined
in such documents or which, with notice or lapse of time or both, would
constitute such an event of default.
(j) There are no contracts or other documents required to be
described in the Registration Statement or to be filed as exhibits to
the Registration Statement by the Act or by the Rules and Regulations
which have not been described or filed as required. The descriptions of
the contracts so described in the Prospectus are accurate; all such
contracts are in full force and effect on the date hereof; and neither
the Company nor any of its subsidiaries, nor to the best of the
Company's knowledge, any other party is in breach of or default under
any of such contracts.
(k) There are no legal or governmental actions, suits or
proceedings pending or, to the best of the Company's knowledge,
threatened to which the Company or any of its subsidiaries is or may be
a party or of which property owned or leased by the Company or any of
its subsidiaries is or may be the subject, or related to environmental
or discrimination matters, which actions, suits or proceedings might,
individually or in the aggregate, prevent or adversely affect the
transactions contemplated by this Agreement or result in a material
adverse change in the condition (financial or otherwise), properties,
business, results of operations or, to the best of the Company's
knowledge, prospects of the Company and its subsidiaries; and no labor
disturbance by the employees of the Company or any of its subsidiaries
exists or is imminent which might be expected to affect adversely such
condition, properties, business, results of operations or, to the best
of Company's knowledge, prospects. Neither the Company nor any of its
subsidiaries is a party or subject to the provisions of any material
injunction, judgment, decree or order of any court, regulatory body,
administrative agency or other governmental body.
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(l) The Company or the applicable subsidiary has good and
marketable title to all the properties and assets reflected as owned in
the financial statements hereinabove described (or elsewhere in the
Prospectus), subject to no lien, mortgage, pledge, charge or encumbrance
of any kind except (i) those, if any, reflected in such financial
statements (or elsewhere in the Prospectus), or (ii) those which are not
material in amount and do not adversely affect the use made and proposed
to be made of such property by the Company and its subsidiaries. The
Company or the applicable subsidiary holds its leased properties under
valid and binding leases, with such exceptions as are not materially
significant in relation to the business of the Company. Except as
disclosed in the Prospectus, the Company owns or leases all such
properties as are necessary to its operations as now conducted or as
proposed to be conducted as described in the Registration Statement.
(m) Since the respective dates as of which information is given
in the Registration Statement and Prospectus, and except as described in
or specifically contemplated by the Prospectus: (i) the Company and its
subsidiaries have not incurred any material liabilities or obligations,
indirect, direct or contingent, or entered into any material verbal or
written agreement or other transaction which is not in the ordinary
course of business; (ii) the Company and its subsidiaries have not
sustained any material loss or interference with their respective
businesses or properties from fire, flood, windstorm, accident or other
calamity, whether or not covered by insurance; (iii) the Company has not
paid or declared any dividends or other distributions with respect to
its issued share capital and the Company and its subsidiaries are not in
default in the payment of principal or interest on any outstanding debt
obligations; (iv) there has not been any change in the share capital
(other than upon the sale of the Common Shares hereunder and the grant
of options in the ordinary course of business or exercise of options
disclosed in the Prospectus) or indebtedness material to the Company and
its subsidiaries (other than in the ordinary course of business); and
(v) there has not been any material adverse change in the condition
(financial or otherwise), business, properties, results of operations
or, to the best of the Company's knowledge, prospects of the Company and
its subsidiaries.
(n) Except as disclosed in or specifically contemplated by the
Prospectus, the Company and its subsidiaries have sufficient trademarks,
trade names, patent rights, mask works, copyrights, licenses, approvals
and governmental authorizations to conduct their businesses as now
conducted; the expiration of any trademarks, trade names, patent rights,
mask works, copyrights, licenses, approvals or governmental
authorizations would not have a material adverse effect on the condition
(financial or otherwise), business, results of operations or, to the
best of the Company's knowledge, prospects of the Company or its
subsidiaries; and the Company has no knowledge of
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any material infringement by it or its subsidiaries of trademark, trade
name rights, patent rights, mask works, copyrights, licenses, trade
secret or other similar rights of others, and there is no claim being
made against the Company or its subsidiaries regarding trademark, trade
name, patent, mask work, copyright, license, trade secret or other
infringement which could have a material adverse effect on the condition
(financial or otherwise), business, results of operations or, to the
best of the Company's knowledge, prospects of the Company and its
subsidiaries.
(o) The Company has not been advised, and has no reason to
believe, that either it or any of its subsidiaries is not conducting
business in compliance with all applicable laws, rules and regulations
of the jurisdictions in which it is conducting business, including,
without limitation, all applicable local, state and federal
environmental laws and regulations; except where failure to be so in
compliance would not materially adversely affect the condition
(financial or otherwise), business, results of operations or, to the
best of the Company's knowledge, prospects of the Company and its
subsidiaries.
(p) The Company and its subsidiaries have filed all necessary
federal, national, state, provincial, foreign and other income and
franchise tax returns and have paid all taxes shown as due thereon; and
the Company has no knowledge of any tax deficiency which has been or
might be asserted or threatened against the Company or its subsidiaries
which could materially and adversely affect the business, operations or
properties of the Company and its subsidiaries.
(q) The Company is not an "investment company" within the meaning
of the Investment Company Act of 1940, as amended.
(r) The Company has not distributed and will not distribute prior
to the Closing Date any offering material in connection with the
offering and sale of the Common Shares other than the Prospectus, the
Registration Statement and the other materials permitted by the Act.
(s) Each of the Company and its subsidiaries maintain insurance
of the types and in the amounts generally deemed adequate for its
business, including, but not limited to, insurance covering real and
personal property owned or leased by the Company and its subsidiaries
against theft, damage, destruction, acts of vandalism and all other
risks customarily insured against, all of which insurance is in full
force and effect.
(t) To the Company's knowledge, except as otherwise disclosed in
or specifically contemplated by the Prospectus or as would not,
individually or in the aggre-
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gate, result in a material adverse change in the condition (financial or
otherwise) business or results of operations (i) neither the Company nor
any of its subsidiaries is in violation of any federal, state, local or
foreign law or regulation relating to pollution or protection of human
health or the environment (including, without limitation, ambient air,
surface water, groundwater, land surface or subsurface strata) or
wildlife, including without limitation, laws and regulations relating to
emissions, discharges, releases or threatened releases of chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous
substances, petroleum and petroleum products (collectively, "Materials
of Environmental Concern"), or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport
or handling of Materials of Environment Concern (collectively,
"Environmental Laws"), which violation includes, but is not limited to,
noncompliance with any permits or other governmental authorizations
required for the operation of the business of the Company or its
subsidiaries under applicable Environmental Laws, or noncompliance with
the terms and conditions thereof, nor has the Company or any of its
subsidiaries received any written communication, whether from a
governmental authority, citizens group, employee or otherwise, that
alleges that the Company or any of its subsidiaries is in violation of
any Environmental Law; (ii) there is no claim, action or cause of action
filed with a court or governmental authority, no investigation with
respect to which the Company has received written notice, and no written
notice by any person or entity alleging potential liability for
investigatory costs, cleanup costs, governmental responses costs,
natural resources damages, property damages, personal injuries,
attorneys' fees or penalties arising out of, based on or resulting from
the presence, or release into the environment, of any Material of
Environmental Concern at any location owned, leased or operated by the
Company or any of its subsidiaries, now or in the past (collectively,
"Environmental Claims"), pending or threatened in writing against the
Company or any of its subsidiaries or any person or entity whose
liability for any Environmental Claim the Company or any of its
subsidiaries has retained or assumed either contractually or by
operation of law; and (iii) there are no present actions, activities,
circumstances, conditions, events or incidents, including, without
limitation, the release, emission, discharge, presence or disposal of
any Material of Environmental Concern, that reasonably could result in a
violation of any Environmental Law or form the basis of a potential
Environmental Claim against the Company or any of its subsidiaries or
against any person or entity whose liability for any Environmental Claim
the Company or any of its subsidiaries has retained or assumed either
contractually or by operation of law.
(u) Neither the Company nor any of its subsidiaries has at any
time during the last five years (i) made any unlawful contribution to
any candidate for public office, or failed to disclose fully any
contribution in violation of law, or (ii) made any payment to any
governmental officer or official, or other person charged with similar
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public or quasi-public duties, other than payments required or permitted
by the laws of the United States or any jurisdiction thereof.
(v) The Company 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
Ordinary Shares to facilitate the sale or resale of the Common Shares.
(w) Subject to the approval of the list of purchasers by the
Board of Directors of the Company as referred to in (e) above, no
transfer taxes are required to be paid in connection with the sale and
delivery of the Common Shares to the Underwriter hereunder.
(x) The Ordinary Shares (including the Common Shares) are
registered pursuant to Section 12(g) of the Exchange Act and are 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 Ordinary Shares under the Exchange Act or delisting
the Ordinary Shares from the Nasdaq National Market, nor has the Company
received any notification that the Commission or the NASD is
contemplating terminating such registration or listing.
(y) 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 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, 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 statements therein, in the
light of the circumstances under which they were made, not misleading.
Any certificate signed by an officer of the Company and delivered
to the Underwriter or to counsel for the Underwriters shall be deemed to be a
representation and warranty by the Company to each Underwriter as to the matters
covered thereby.
3. Representations and Warranties of the Underwriters. The
Underwriters represent and warrant to the Company that the information set forth
on the cover page of the Prospectus with respect to price, underwriting
discounts and commissions and the information (other than the first, third,
fourth, fifth, sixth, eleventh and twelfth paragraphs) under "Underwriting" in
the Prospectus was furnished to the Company by and on behalf of the Underwrit-
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ers for use in connection with the preparation of the Prospectus and is correct
in all material respects.
4. Purchase, Sale and Delivery of Common Shares.
(a) The Firm Common Shares; the First Closing Date. Upon the
terms herein set forth, the Company agrees to issue and sell to the several
Underwriters an aggregate of 5,500,000 Firm Common Shares. On the basis of the
representations, warranties and agreements herein contained, and upon the terms
but subject to the conditions herein set forth, the Underwriters agree,
severally and not jointly, to purchase from the Company the respective number of
Firm Common Shares set forth opposite their names on Schedule A. The purchase
price per Firm Common Share to be paid by the several Underwriters to the
Company shall be $68.44 per share.
Delivery of certificates for the Firm Common Shares to be
purchased by the Underwriters and payment therefor shall be made at the offices
of Banc of America Securities LLC, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ (or such other place as may be agreed to by the Company and the
Representatives) at 6:00 a.m. San Francisco time, on June 23, 2000, or such
other time and date not later than 10:30 a.m. San Francisco time, on June 23,
2000 as the Representatives shall designate by notice to the Company (the time
and date of such closing are called the "First Closing Date"). The Company
hereby acknowledges that circumstances under which the Representatives may
provide notice to postpone the First Closing Date as originally scheduled
include, but are in no way limited to, any determination by the Company or the
Representatives to recirculate to the public copies of an amended or
supplemented Prospectus or a delay as contemplated by the provisions of Section
11.
(b) The Optional Common Shares; the Second Closing Date. In
addition, on the basis of the representations, warranties and agreements herein
contained, and upon the terms but subject to the conditions herein set forth,
the Company hereby grants an option to the several Underwriters to purchase,
severally and not jointly, up to an aggregate of 825,000 Optional Common Shares
from the Company at the purchase price per share to be paid by the Underwriters
for the Firm Common Shares. The option granted hereunder is for use by the
Underwriters solely in covering any over-allotments in connection with the sale
and distribution of the Firm Common Shares. The option granted hereunder may be
exercised at any time (but not more than once) upon notice by the
Representatives to the Company which notice may be given at any time within 30
days from the date of this Agreement. Such notice shall set forth (i) the
aggregate number of Optional Common Shares as to which the Underwriters are
exercising the option, (ii) the names and denominations in which the
certificates for the Optional Common Shares are to be registered and (iii) the
time, date and place at which such certificates will be delivered (which time
and date may be simultaneous with, but not earlier
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than, the First Closing Date; and in such case the term "First Closing Date"
shall refer to the time and date of delivery of certificates for the Firm Common
Shares and the Optional Common Shares). Such time and date of delivery, if
subsequent to the First Closing Date, is called the "Second Closing Date" and
shall be determined by the Representatives and shall not be earlier than three
nor later than five full business days after delivery of such notice of
exercise. If any Optional Common Shares are to be purchased, (a) each
Underwriter agrees, severally and not jointly, to purchase the number of
Optional Common Shares (subject to such adjustments to eliminate fractional
shares as the Representative may determine) that bears the same proportion to
the total number of Optional Common Shares to be purchased as the number of Firm
Common Shares set forth on Schedule A opposite the name of such Underwriter
bears to the total number of Firm Common Shares and the Company agrees to sell
the total number of Optional Common Shares to be sold. The Representatives may
cancel the option at any time prior to its expiration by giving written notice
of such cancellation to the Company.
(c) Public Offering of the Common Shares. The Representatives
hereby advise the Company that the Underwriters intend to offer for sale to the
public, as described in the Prospectus, their respective portions of the Common
Shares as soon after this Agreement has been executed as the Representatives, in
their sole judgment, have determined is advisable and practicable.
(d) Payment for the Common Shares. Payment for the Common Shares
to be sold by the Company shall be made at the First Closing Date (and, if
applicable, at the Second Closing Date) by wire transfer of immediately
available funds to the order of the Company.
It is understood that the Representatives have been authorized,
for their own account and the accounts of the several Underwriters, to accept
delivery of and receipt for, and make payment of the purchase price for, the
Firm Common Shares and any Optional Common Shares the Underwriters have agreed
to purchase. Banc of America Securities LLC, individually and not as a
Representative of the Underwriters, may (but shall not be obligated to) make
payment for any Common Shares to be purchased by any Underwriter whose funds
shall not have been received by the Representatives by the First Closing Date or
the Second Closing Date, as the case may be, for the account of such
Underwriter, but any such payment shall not relieve such Underwriter from any of
its obligations under this Agreement.
(e) Delivery of the Common Shares. The Company shall deliver, or
cause to be delivered, to the Representatives for the accounts of the several
Underwriters certificates for the Firm Common Shares to be sold at the First
Closing Date, against the irrevocable release of a wire transfer of immediately
available funds for the amount of the purchase price therefor. The Company shall
also deliver, or cause to be delivered, to the Representatives for the accounts
of the several Underwriters, certificates for the Optional Common Shares the
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Underwriters have agreed to purchase at the First Closing Date or the Second
Closing Date, as the case may be, against the irrevocable release of a wire
transfer of immediately available funds for the amount of the purchase price
therefor. The certificates for the Common Shares shall be in definitive form and
registered in such names and denominations as the Representatives shall have
requested at least two full business days prior to the First Closing Date (or
the Second Closing Date, as the case may be) and shall be made available for
inspection on the business day preceding the First Closing Date (or the Second
Closing Date, as the case may be) at a location in New York as the
Representatives may designate. Time shall be of the essence, and delivery at the
time and place specified in this Agreement is a further condition to the
obligations of the Underwriters.
(f) Delivery of Prospectus to the Underwriters. Not later than
12:00 p.m. on the second business day following the date the Common Shares are
first released by the Underwriters for the sale to the public, the Company shall
deliver or cause to be delivered, copies of the Prospectus in such quantities
and at such places as the Representatives shall request.
5. Covenants of the Company. The Company covenants and agrees
that:
(a) If the filing of the Prospectus is required under Rule 424(b)
of the Rules and Regulations, the Company will file the Prospectus, properly
completed, pursuant to the applicable paragraph of Rule 424(b) of the Rules and
Regulations within the time period prescribed and will provide evidence
satisfactory to you of such timely filing. The Company will promptly advise you
in writing (i) of the receipt of any comments of the Commission, (ii) of any
request of the Commission for amendment of or supplement to the Registration
Statement, the Basic Prospectus or the Prospectus or for additional information,
and (iii) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of the institution of any
proceedings for that purpose. If the Commission shall enter any such stop order
at any time, the Company will use its best efforts to obtain the lifting of such
order at the earliest possible moment. The Company will not file any amendment
or supplement to the Registration Statement, the Basic Prospectus or the
Prospectus (including any amendment or supplement through incorporation by
reference of any report filed under the Exchange Act) of which you have not been
furnished with a copy a reasonable time prior to such filing or to which you
reasonably object or which is not in compliance with the Act and the Rules and
Regulations.
(b) The Company will prepare and file with the Commission,
promptly upon your request, any amendments or supplements to the Registration
Statement or the Prospectus which in your judgment may be necessary or advisable
to enable the Underwriters to continue the distribution of the Common Shares and
will use its best efforts to cause the same to become effective as promptly as
possible. The Company will fully and completely comply
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with the provisions of Rules 424(b), 430A and 434, as applicable, of the Rules
and Regulations with respect to information omitted from the Registration
Statement in reliance upon any such Rule.
(c) If at any time within the nine-month period referred to in
Section 10(a)(3) of the Act during which a prospectus relating to the Common
Shares is required to be delivered under the Act any event occurs, as a result
of which the Prospectus, including any amendments or supplements, would include
an untrue statement of a material fact, or omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading, or if it is necessary at any time to amend the Prospectus, including
any amendments or supplements, to comply with the Act or the Rules and
Regulations, the Company will promptly advise you thereof and will promptly
prepare and file with the Commission, at its own expense, an amendment or
supplement which will correct such statement or omission or an amendment or
supplement which will effect such compliance and will use its best efforts to
cause the same to become effective as soon as possible; and, in case the
Underwriters are required to deliver a prospectus after such nine-month period,
the Company upon request, but at the expense of the Underwriters, will promptly
prepare such amendment or amendments to the Registration Statement and the
Prospectus as may be necessary to permit compliance with the requirements of
Section 10(a)(3) of the Act.
(d) As soon as practicable, but not later than 45 days after the
end of the first quarter ending after one year following the "effective date of
the Registration Statement" (as defined in Rule 158(c) of the Rules and
Regulations), the Company will make generally available to its security holders
an earning statement (which need not be audited) covering a period of 12
consecutive months beginning after the effective date of the Registration
Statement which will satisfy the provisions of the last paragraph of Section
11(a) of the Act.
(e) During such period as a prospectus is required by law to be
delivered in connection with sales by an Underwriter or dealer, the Company, at
its expense, but only for the nine-month period referred to in Section 10(a)(3)
of the Act, will furnish to you or mail to your order copies of the Registration
Statement, the Prospectus, the Basic Prospectus and all amendments and
supplements to any such documents (including any documents incorporated or
deemed incorporated by reference therein) in each case as soon as available and
in such quantities as you may request, for the purposes contemplated by the Act.
(f) The Company shall cooperate with you and your counsel in
order to qualify or register the Common Shares for sale under (or obtain
exemptions from the application of) the Blue Sky laws of such jurisdictions as
you designate (including those of Canada) and under the applicable securities
laws of such other nations as you may designate, will comply with such laws and
will continue such qualifications, registrations and exemptions in effect so
long as reasonably required for the distribution of the Common Shares. The Com-
15
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pany shall not be required to qualify as a foreign corporation or to file a
general consent to service of process in any such jurisdiction where it is not
presently qualified. The Company will advise you promptly of the suspension of
the qualification or registration of (or any such exemption relating to) the
Common Shares for offering, sale or trading in any jurisdiction or any
initiation or threat of any proceeding for any such purpose, and in the event of
the issuance of any order suspending such qualification, registration or
exemption, the Company, with your cooperation, will use its best efforts to
obtain the withdrawal thereof.
(g) During the period of five years hereafter, the Company will
furnish to Banc of America Securities LLC: (i) as soon as practicable after the
end of each fiscal year, copies of the Annual Report of the Company containing
the balance sheet of the Company as of the close of such fiscal year and
statements of income, shareholders' equity and cash flows for the year then
ended and the opinion thereon of the Company's independent public accountants;
(ii) as soon as practicable after the filing thereof, copies of each proxy
statement, Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Report on
Form 8-K or other report filed by the Company with the Commission, the NASD or
any securities exchange; and (iii) as soon as available, copies of any report or
communication of the Company mailed generally to holders of its Ordinary Shares.
(h) During the period of 90 days after the first date that any of
the Common Shares are released by you for sale to the public, without the prior
written consent of the Underwriter (which consent may be withheld at the sole
discretion of the Underwriter), the Company will not issue, offer, sell, grant
options to purchase or otherwise dispose of any of the Company's equity
securities or any other securities convertible into or exchangeable with its
Ordinary Shares or other equity security, other than pursuant to outstanding
stock options and warrants disclosed in the Prospectus and other than the grant
of options or the issuance of the Company's equity securities pursuant to the
Company's employee share option plans described in the Prospectus or the
issuance of Ordinary Shares in connection with acquisitions.
(i) The Company will use all reasonable efforts to obtain signed
lock-up agreements from all of its executive officers and directors, the form of
which is attached as Exhibit C, prior to the First Closing Date or promptly
thereafter and such lock-up agreements shall provide for no more than 1,000,000
Ordinary Shares, in the aggregate, to be sold during the 90 day period covered
by such lock-up agreements. The Company shall promptly notify Banc of America
Securities LLC of any sale of Ordinary Shares by any of its executive officers
or directors.
(j) The Company will apply the net proceeds of the sale of the
Common Shares sold by it substantially in accordance with its statements under
the caption "Use of Proceeds" in the Prospectus.
(k) During such period as a prospectus is required by law to be
delivered in connection with sales by an Underwriter or dealer, the Company will
file all documents re-
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quired to be filed with the Commission pursuant to Section 13, 14 or 15 of the
Exchange Act in the manner and within the time periods required by the Exchange
Act.
6. Payment of Expenses. Whether or not the transactions
contemplated hereunder are consummated or this Agreement becomes effective or is
terminated, the Company agrees to pay all costs, fees and expenses incurred in
connection with the performance of its obligations hereunder and in connection
with the transactions contemplated hereby, including without limiting the
generality of the foregoing (i) all expenses incident to the issuance and
delivery of the Common Shares (including all printing and engraving costs), (ii)
all fees and expenses of the registrar and transfer agent of the Ordinary
Shares, (iii) all necessary issue, transfer and other stamp taxes in connection
with the issuance and sale of the Common Shares to the Underwriters, (iv) all
fees and expenses of the Company's counsel and the Company's independent
accountants, including fees of counsel or independent accountants with respect
to any subsidiary of the Company, (v) all costs and expenses incurred in
connection with the printing, filing, shipping and distribution of the
Registration Statement, the Basic Prospectus and the Prospectus (including all
exhibits and financial statements) and all amendments and supplements provided
for herein, this Agreement, any Selected Dealers Agreement, Underwriters' Power
of Attorney or the Blue Sky memorandum, (vi) all filing fees, attorneys' fees
and expenses incurred by the Company or the Underwriters in connection with
qualifying or registering (or obtaining exemptions from the qualification or
registration of) all or any part of the Common Shares for offer and sale under
the Blue Sky laws (including those of Canada) and under the applicable
securities laws of such other nations as you may designate, (vii) the filing fee
incident to the review and approval, if any, of the Underwriters' participation
in the offering and distribution of the Common Shares by the NASD, and (viii)
all other fees, costs and expenses incident to the offering as would typically
be disclosed in Part II of a registration statement under the Act. Except as
provided in this Section 6, Section 8 and Section 10 hereof, the Underwriters
shall pay all of their own expenses, including the fees and disbursements of
counsel (excluding those relating to qualification, registration or exemption
under the Blue Sky laws (including those of Canada) and under the applicable
securities laws of such other nations as you may designate, and the Blue Sky
memorandum).
7. Conditions of the Obligations of the Underwriters. The
obligations of the several Underwriters to purchase and pay for the Common
Shares on the First Closing Date shall be subject to the accuracy of the
representations and warranties on the part of the Company herein set forth as of
the date hereof and as of the First Closing Date as though then made and, with
respect to the Optional Common Shares, as of the Second Closing Date as though
then made, to the accuracy of the statements of Company officers made pursuant
to the provisions hereof, to the performance by the Company of its obligations
hereunder, and to the following additional conditions:
17
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(a) If the filing of the Prospectus, or any supplement thereto,
is required pursuant to Rule 424(b) of the Rules and Regulations, the
Prospectus shall have been filed in the manner and within the time
period required by Rule 424(b) of the Rules and Regulations; and prior
to such Closing Date, no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for
that purpose shall have been instituted or shall be periling or, to the
knowledge of the Company or you, shall be contemplated by the
Commission; and any request of the Commission for inclusion of
additional information in either Registration Statement, or otherwise,
shall have been complied with to your satisfaction.
(b) You shall be satisfied that since the respective dates as of
which information is given in the Registration Statement and the
Prospectus, (i) there shall not have been any change in the authorized
or issued share capital of the Company or any of its subsidiaries other
than pursuant to the exercise of outstanding options disclosed in the
Prospectus or any material change in the indebtedness (other than in the
ordinary course of business) of the Company or any of its subsidiaries,
(ii) except as set forth or contemplated by the Registration Statement
or the Prospectus, no material verbal or written agreement or other
transaction shall have been entered into by the Company or any of its
subsidiaries, which is not in the ordinary course of business or which
could result in a material reduction in the future earnings of the
Company and its subsidiaries, (iii) no loss or damage (whether or not
insured) to the property of the Company or any of its subsidiaries shall
have been sustained which materially and adversely affects the condition
(financial or otherwise), business, results of operations or prospects
of the Company and its subsidiaries, (iv) no legal or governmental
action, suit or proceeding affecting the Company or any of its
subsidiaries which is material to the Company and its subsidiaries or
which affects or may affect the transactions contemplated by this
Agreement shall have been instituted or threatened, and (v) there shall
not have been any material change in the condition (financial or
otherwise), business, management, results of operations or prospects of
the Company and its subsidiaries which makes it impractical or
inadvisable in the judgment of the Underwriters to proceed with the
public offering or purchase the Common Shares as contemplated hereby.
(c) There shall have been furnished to you, on the Closing Date,
in form and substance satisfactory to you, except as otherwise expressly
provided below:
(i) An opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Company,
addressed to the Underwriters and dated the Closing Date, the
form of which is attached as Exhibit A.
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(ii) An opinion of Fenwick & West LLP, special counsel to the
Company, addressed to the Underwriters and dated the Closing
Date, the form of which is attached as Exhibit B.
(iii) Such opinion or opinions of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ and
▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇▇, counsel for the Underwriters, dated
the Closing Date, with respect to the incorporation of the
Company, the sufficiency of all corporate proceedings and other
legal matters relating to this Agreement, the validity of the
Common Shares, the Registration Statement and the Prospectus and
other related matters as you may reasonably require, and the
Company shall have furnished to such counsel such documents and
shall have exhibited to them such papers and records as they may
reasonably request for the purpose of enabling them to pass upon
such matters. In connection with such opinions, such counsel may
rely on representations or certificates of officers of the
Company and governmental officials.
(iv) A certificate of the Company executed by the Chief
Executive Officer and President, Systems Group of the Company,
dated the Closing Date, to the effect that:
(1) The representations and warranties of the
Company set forth in Section 2 of this Agreement are true
and correct as of the date of this Agreement and as of the
Closing Date, 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 on or
prior to the Closing Date;
(2) The Commission has not issued any order
preventing or suspending the use of the Prospectus or any
Basic Prospectus filed as a part of the Registration
Statement or any amendment thereto; no stop order
suspending the effectiveness of the Registration Statement
has been issued; and to the best of the knowledge of the
respective signers, no proceedings for that purpose have
been instituted or are pending under the Act;
(3) Each of the respective signers of the
certificate has carefully examined the Registration
Statement and the Prospectus; to the best of his
knowledge, the Registration Statement and the Prospectus
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and any amendments or supplements thereto contain all
statements required to be stated therein regarding the
Company and its subsidiaries; and neither the Registration
Statement nor the Prospectus nor any amendment or
supplement thereto includes any untrue statement of a
material fact or omits to state any material fact required
to be stated therein or necessary to make the statements
therein not misleading;
(4) Since the initial date on which the
Registration Statement was filed, no agreement, written or
oral, transaction or event has occurred which should have
been set forth in an amendment to the Registration
Statement or in a supplement to or amendment of any
prospectus which has not been disclosed in such a
supplement or amendment;
(5) Since the respective dates as of which
information is given in the Registration Statement and the
Prospectus, and except as disclosed in or contemplated by
the Prospectus, there has not been any material adverse
change or a development involving a material adverse
change in the condition (financial or otherwise),
business, properties, results of operations, management
or, to the best knowledge of the respective signing
officers, prospects of the Company and its subsidiaries;
and no legal or governmental action, suit or proceeding is
pending or threatened against the Company or any of its
subsidiaries which is material to the Company and its
subsidiaries, whether or not arising from transactions in
the ordinary course of business, or which may adversely
affect the transactions contemplated by this Agreement;
since such dates and except as so disclosed, neither the
Company nor any of its subsidiaries has entered into any
verbal or written agreement or other transaction not in
the ordinary course of business or which could result in a
material reduction in the future earnings of the Company
or incurred any material liability or obligation, direct,
contingent or indirect, made any change in its capital
stock, made any material change in its short-term debt or
funded debt or repurchased or otherwise acquired any of
the Company's capital stock; and the Company has not
declared or paid any dividend, or made any other
distribution, upon its outstanding capital stock payable
to shareholders of record on a date prior to the Closing
Date;
(6) No "nationally recognized statistical rating
organization" as such term is defined for purposes of Rule
436(g)(2) under the Act has downgraded or given notice of
any intended or potential downgrading as of any review for
a possible change that does not indicate the di-
20
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rection of the possible change in the rating accorded any
securities of the Company; and
(7) Since the respective dates as of which
information is given in the Registration Statement and the
Prospectus and except as disclosed in or contemplated by
the Prospectus, the Company and its subsidiaries have not
sustained a material loss or damage by strike, fire,
flood, windstorm, accident or other calamity (whether or
not insured).
(v) On the Closing Date a letter addressed to you, from
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, Deloitte & Touche and
PricewaterhouseCoopers, independent accountants, in form and
substance satisfactory to the Underwriters.
(vi) On the date hereof, the Company shall have furnished to
the Representatives an agreement in the form of Exhibit C hereto
from the executive officers and directors of the Company named in
Schedule B attached hereto, and such agreement shall be in full
force and effect on each of the First Closing Date and the Second
Closing Date.
(d) The NASD shall have raised no objection to the fairness and
reasonableness of the underwriting terms and arrangements.
All such opinions, certificates, letters and documents shall be
in compliance with the provisions hereof only if they are satisfactory to you
and to ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the Underwriters. The Company shall
furnish you with such manually signed or conformed copies of such opinions,
certificates, letters and documents as you request.
If any condition to the Underwriters' obligations hereunder to be
satisfied prior to or at the Closing Date is not so satisfied, this Agreement at
your election will terminate upon notification by you to the Company without
liability on the part of the Underwriters or the Company except for the expenses
to be paid or reimbursed by the Company pursuant to Sections 6 and 8 hereof and
except to the extent provided in Section 10 hereof.
8. Reimbursement of Underwriters' Expenses. Notwithstanding any
other provisions hereof, if this Agreement shall be terminated by you pursuant
to Sections 7 or 13, or if the sale to the Underwriters of the Common Shares at
the Closing is not consummated because of any refusal, inability or failure on
the part of the Company to perform any agreement herein or to comply with any
provision hereof, the Company agrees to reimburse you upon demand for all
out-of-pocket expenses that shall have been reasonably incurred by you and them
in connection with the proposed purchase and the sale of the Common Shares,
including but not limited to fees and disbursements of counsel, printing
expenses, travel ex-
21
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penses, postage, telegraph charges and telephone charges relating directly to
the offering contemplated by the Prospectus. Any such termination shall be
without liability of any party to any other party except that the provisions of
this Section, Section 6 and Section 10 shall at all times be effective and shall
apply.
9. Effectiveness of Registration Statement. The parties will use
their best efforts to prevent the issuance of any stop order suspending the
effectiveness of the Registration Statement and, if such stop order be issued,
to obtain as soon as possible the lifting thereof.
10. Indemnification.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of the Act against any losses, claims, damages, liabilities or expenses,
joint or several, to which any Underwriter or such controlling person may become
subject, under the Act, the Exchange Act, or other federal or state statutory
law or regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of the
Company), insofar as such losses, claims, damages, liabilities or expenses (or
actions in respect thereof as contemplated below) arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact contained
in the Registration Statement, the Basic Prospectus, the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state in any of them a material fact required to be
stated therein or necessary to make the statements in any of them not
misleading, or arise out of or are based in whole or in part on any inaccuracy
in the representations and warranties of the Company contained herein or any
failure of the Company to perform its obligations hereunder or under law; and
will reimburse the Underwriters and each such controlling person for any legal
and other expenses as such expenses are reasonably incurred by the Underwriters
or such controlling person in connection with investigating, defending,
settling, compromising or paying any such loss, claim, damage, liability,
expense or action; provided, however, that the Company will not be liable in any
such case to the extent that any such loss, claim, damage, liability or expense
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 Basic
Prospectus, the Prospectus or any amendment or supplement thereto in reliance
upon and in conformity with the information furnished to the Company pursuant to
Section 3 hereof provided further, that the indemnity provided in this Section
10(a) with respect to the Basic Prospectus shall not inure to the benefit of the
Underwriters if the person asserting any loss, claim, charge, liability or
litigation based upon any untrue statement or alleged untrue statement of a
material fact or omission or alleged omission to state therein a material fact
was not sent or given a copy of the Prospectus in which such untrue statement or
alleged untrue statement or omission or alleged omission was corrected within
the time required by the Act and the Rules
22
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and Regulations thereunder. In addition to its other obligations under this
Section 10(a), the Company agrees that, as an interim measure during the
pendency of any claim, action, investigation, inquiry or other proceeding
arising out of or based upon any statement or omission, or any alleged statement
or omission, or any inaccuracy in the representations and warranties of the
Company herein or failure to perform its obligations hereunder, all as described
in this Section 10(a), it will reimburse the Underwriters on a quarterly basis
for all reasonable legal or other expenses incurred in connection with
investigating or defending any such claim, action, investigation, inquiry or
other proceeding, notwithstanding the absence of a judicial determination as to
the propriety and enforceability of its obligation to reimburse the Underwriters
for such expenses and the possibility that such payments might later be held to
have been improper by a court of competent jurisdiction. To the extent that any
such interim reimbursement payment is so held to have been improper, the
Underwriters shall promptly return it together with interest, compounded daily,
determined on the basis of the prime rate (or other commercial lending rate for
borrowers of the highest credit standing) announced from time to time by Bank of
America, N.A. (the "Prime Rate"). Any such interim reimbursement payments which
are not made to the Underwriters within 30 days of a request for reimbursement
shall bear interest at the Prime Rate from the date of such request. This
indemnity agreement will be in addition to any liability which the Company may
otherwise have.
(b) Each Underwriter, severally and not jointly, will indemnify
and hold harmless the Company, each of its directors, each of its officers who
signed the Registration Statement and each person, if any, who controls the
Company within the meaning of the Act, against any losses, claims, damages,
liabilities or expenses to which the Company, or any such director, officer or
controlling person may become subject, under the Act, the Exchange Act, or other
federal or state statutory law or regulation, or at common law or otherwise
(including in settlement of any litigation, if such settlement is effected with
the written consent of the Underwriters), insofar as such losses, claims,
damages, liabilities or expenses (or actions in respect thereof as contemplated
below) arise out of or are based upon any untrue or alleged untrue statement of
any material fact contained in the Registration Statement, the Basic Prospectus,
the Prospectus, or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in any Registration Statement, any Basic Prospectus, the Prospectus, or any
amendment or supplement thereto, in reliance upon and in conformity with written
information furnished to the Company pursuant to Section 3 hereof; and will
reimburse the Company, or any such director, officer or controlling person for
any legal and other expense reasonably incurred by the Company, or any such
director, officer or controlling person in connection with investigating,
defending, settling, compromising or paying any such loss, claim, damage,
liability, expense or action. In addition to its other obligations under this
23
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Section 10(b), each of the Underwriters agrees that, as an interim measure
during the pendency of any claim, action, investigation, inquiry or other
proceeding arising out of or based upon any statement or omission, or any
alleged statement or omission, described in this Section 10(b) which relates to
written information furnished to the Company, it will reimburse the Company
(and, to the extent applicable, each officer, director or controlling person) on
a quarterly basis for all reasonable legal or other expenses incurred in
connection with investigating or defending any such claim, action,
investigation, inquiry or other proceeding, notwithstanding the absence of a
judicial determination as to the propriety and enforceability of the
Underwriters' obligation to reimburse the Company (and, to the extent
applicable, each officer, director or controlling person) for such expenses and
the possibility that such payments might later be held to have been improper by
a court of competent jurisdiction. To the extent that any such interim
reimbursement payment is so held to have been improper, the Company (and, to the
extent applicable, each officer, director or controlling person) shall promptly
return it to the Underwriters together with interest, compounded daily,
determined on the basis of the Prime Rate. Any such interim reimbursement
payments which are not made to the Company within 30 days of a request for
reimbursement, shall hear interest at the Prime Rate from the date of such
request. This indemnity agreement will be in addition to any liability which the
Underwriters may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against an indemnifying party
under this Section, 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 for
contribution or otherwise than under the indemnity agreement contained in this
Section or to the extent it is not prejudiced as a proximate result of such
failure. In case any such action is brought against any indemnified party and
such indemnified party seeks or intends to seek indemnity from an indemnifying
party, the indemnifying party will be entitled to participate in, and, to the
extent that it may wish, jointly with all other indemnifying parties similarly
notified, to assume the defense thereof with counsel reasonably satisfactory to
such indemnified party; provided, however, 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 a conflict
between the positions of the indemnifying party and the indemnified party in
conducting the defense of any such action or 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 its election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying party
will not be
24
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liable to such indemnified party under this Section 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 such
counsel in connection with the assumption of legal defenses 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 representing the indemnified parties who are parties to such
action) or (ii) the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of commencement of the action, in
each of which cases the fees and expenses of counsel shall be at the expense of
the indemnifying party.
(d) If the indemnification provided for in this Section 10 is
required by its terms but is for any reason held to be unavailable to or
otherwise insufficient to hold harmless an indemnified party under paragraphs
(a), (b) or (c) in respect of any losses, claims, damages, liabilities or
expenses referred to herein, then each applicable indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of any losses, claims, damages, liabilities or expenses referred to herein (i)
in such proportion as is appropriate to reflect the relative benefits received
by the Company, on the one hand, and the Underwriters, on the other hand, from
the offering of the Common 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 Company, on the one hand, and the
Underwriters, on the other hand, in connection with the statements or omissions
or inaccuracies in the representations and warranties herein which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The respective relative benefits received by
the Company, on the one hand, and the Underwriters, on the other hand, shall be
deemed to be in the same proportion, in the case of the Company, as the total
price paid to the Company for the Common Shares sold by it to the Underwriters
(net of underwriting commissions but before deducting expenses) bears to the
total price to the public set forth on the cover of the Prospectus, and in the
case of the Underwriters as the underwriting commissions received by it bears to
the total of such amounts paid to the Company and received by the Underwriters
as underwriting commissions. The relative fault of the Company, 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 or the
inaccurate or the alleged inaccurate representation and/or warranty relates to
information supplied by the Company, on the one hand, or the Underwriters, on
the other hand, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to include,
subject to the limitations set forth in subparagraph (c) of this Sec-
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tion 10, any legal or other fees or expenses reasonably incurred by such party
in connection with investigating or defending any action or claim. The
provisions set forth in subparagraph (c) of this Section 10 with respect to
notice of commencement of any action shall apply if a claim for contribution is
to be made under this subparagraph (d); provided, however, that no additional
notice shall be required with respect to any action for which notice has been
given under subparagraph (c) for purposes of indemnification. The Company and
the Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 10 were determined solely by pro rata allocation or by
any other method of allocation which does not take account of the equitable
considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 10, the Underwriters shall not be
required to contribute any amount in excess of the amount of the total
underwriting commissions received by the Underwriters in connection with the
Common Shares underwritten by it and distributed to the public. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(e) It is agreed that any controversy arising out of the
operation of the interim reimbursement arrangements set forth in Sections 10(a)
and 10(b) hereof, including the amounts of any requested reimbursement payments
and the method of determining such amounts, shall be settled by arbitration
conducted under the provisions of the Constitution and Rules of the Board of
Governors of the New York Stock Exchange, Inc. or pursuant to the Code of
Arbitration Procedure of the NASD. Any such arbitration must be commenced by
service of a written demand for arbitration or written notice of intention to
arbitrate, therein electing the arbitration tribunal. In the event the party
demanding arbitration does not make such designation of an arbitration tribunal
in such demand or notice, then the party responding to said demand or notice is
authorized to do so. Such an arbitration would be limited to the operation of
the interim reimbursement provisions contained in Sections 10(a) and 10(b)
hereof and would not resolve the ultimate propriety or enforceability of the
obligation to reimburse expenses which is created by the provisions of such
Sections 10(a) and 10(b) hereof.
11. Default of One or More of the Several Underwriters. If, on
the First Closing Date or the Second Closing Date, as the case may be, any one
or more of the several Underwriters shall fail or refuse to purchase Common
Shares that it or they have agreed to purchase hereunder on such date, and the
aggregate number of Common Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase does not exceed 10% of the
aggregate number of the Common Shares to be purchased on such date, the other
Underwriters shall be obligated, severally, and in the proportions that the
number of Firm Common Shares set forth opposite their respective names on
Schedule A bears to the aggregate number of Firm Common Shares set forth
opposite the names of all such non-defaulting Underwriters, or in such other
proportions as may be specified by the Representa-
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tives with the consent of the non-defaulting Underwriters, to purchase the
Common Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase on such date. If, on the First Closing Date or the
Second Closing Date, as the case may be, any one or more of the Underwriters
shall fail or refuse to purchase Common Shares and the aggregate number of
Common Shares with respect to which such default occurs exceeds 10% of the
aggregate number of Common Shares to be purchased on such date, and arrangements
satisfactory to the Representatives and the Company for the purchase of such
Common Shares are not made within 48 hours after such default, this Agreement
shall terminate without liability of any party to any party except that the
provisions of Section 6, Section 8 and Section 10 shall at all times be
effective and shall survive such termination. In any such case either the
Representatives or the Company shall have the right to postpone the First
Closing Date or the Second Closing Date, as the case may be, but in no event for
longer than seven 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.
As used in this Agreement, the term "Underwriter" shall be deemed
to include any person substituted for a defaulting Underwriter under this
Section 11. Any action taken under this Section 11 shall not relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
12. Effective Date. This Agreement shall become effective
immediately as to Sections 6, 8, 10, 13 and 15 and, as to all other provisions,
at 9:00 a.m., California time, on the date of execution of this Agreement.
13. Termination. Without limiting the right to terminate this
Agreement pursuant to any other provision hereof:
(a) This Agreement may be terminated by the Company by notice to
you or by you by notice to the Company at any time prior to the time
this Agreement shall become effective as to all its provisions, and any
such termination shall be without liability on the part of the Company
to the Underwriters (except for the expenses to be paid or reimbursed by
the Company pursuant to Sections 6 and 8 hereof and except to the extent
provided in Section 10 hereof) or of the Underwriters to the Company
(except to the extent provided in Section 10 hereof).
(b) This Agreement may also be terminated by you prior to the
Closing Date by notice to the Company (i) if additional material
governmental restrictions, not in force and effect on the date hereof,
shall have been imposed upon trading in securities generally or minimum
or maximum prices shall have been generally established on the New York
Stock Exchange or on the American Stock Exchange or in the over the
counter market by the NASD, or trading in securities generally shall
have been
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suspended on either such Exchange or in the over the counter market by
the NASD, or a general banking moratorium shall have been established by
federal, New York or California authorities, (ii) if an outbreak of
major hostilities or other national or international calamity or any
substantial change in political, financial or economic conditions shall
have occurred or shall have accelerated or escalated to such an extent,
as, in the judgment of the Underwriters, to affect adversely the
marketability of the Common Shares, (iii) if any adverse event shall
have occurred or shall exist which makes untrue or incorrect in any
material respect any statement or information contained in the
Registration Statement or the Prospectus or which is not reflected in
the Registration Statement or the Prospectus but should be reflected
therein in order to make the statements or information contained therein
not misleading in any material respect, or (iv) if there shall be any
action, suit or proceeding pending or threatened, or there shall have
been any development or prospective development involving particularly
the business or properties or securities of the Company or any of its
subsidiaries or the transactions contemplated by this Agreement, which,
in the reasonable judgment of the Underwriters, may materially and
adversely affect the Company's business or earnings and makes it
impracticable or inadvisable to offer or sell the Common Shares. Any
termination pursuant to this subsection (b) shall be without liability
on the part of the Underwriters to the Company or on the part of the
Company to the Underwriters (except for expenses to be paid or
reimbursed by the Company pursuant to Sections 6 and 8 hereof and except
to the extent provided in Section 10 hereof).
14. Representations and Indemnities to Survive Delivery. The
respective indemnities, agreements, representations, warranties and other
statements of the Company, of its officers and of the Underwriters set forth in
or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation made by or on behalf of the Underwriters or the
Company or any of its or their partners, officers or directors or any
controlling person, as the case may be, and will survive delivery of and payment
for the Common Shares sold hereunder and any termination of this Agreement.
15. Notices. All communications hereunder shall be in writing
and, if sent to the Representatives shall be mailed, delivered or telegraphed
and confirmed to you at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, with a copy to ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇; and if sent to the
Company shall be mailed, delivered or telegraphed and confirmed to the Company
at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, #▇▇-▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ 1646,
Attention: President and Chief Operating Officer and ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Chief Executive Officer, with a copy to Fenwick &
West LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
Any of the parties hereto may change the address for receipt of communications
hereunder by giving notice to the others.
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16. Successors. This Agreement will inure to the benefit of and
be binding upon the parties hereto, and to the benefit of the officers and
directors and controlling persons referred to in Section 10, and in each case
their respective successors, personal representatives and assigns, and no other
person will have any right or obligation hereunder. No such assignment shall
relieve any party of its obligations hereunder. The term "successors" shall not
include any purchaser of the Common Shares as such from the Underwriters merely
by reason of such purchase.
17. 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.
18. Applicable Law.
(a) This Agreement shall be governed by and construed in
accordance with the internal laws (and not the laws pertaining to conflicts of
laws) of the State of New York.
(b) 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 exclusive 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, to the maximum extent permitted by law,
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. Each party
not located in the United States irrevocably appoints CT Corporation System,
which currently maintains a San Francisco office at ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ of America, as its agent to receive
service of process or other legal summons for purposes of any such suit, action
or proceeding that may be instituted in any state or federal court in the City
and County of San Francisco.
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(c) With respect to any Related Proceeding, each party
irrevocably waives, to the fullest extent permitted by applicable law, all
immunity (whether on the basis of sovereignty or otherwise) from jurisdiction,
service of process, attachment (both before and after judgment) and execution to
which it might otherwise be entitled in the Specified Courts, and with respect
to any Related Judgment, each party waives any such immunity in the Specified
Courts or any other court of competent jurisdiction, and will not raise or claim
or cause to be pleaded any such immunity at or in respect of any such Related
Proceeding or Related Judgment, including, without limitation, any immunity
pursuant to the United States Foreign Sovereign Immunities Act of 1976, as
amended.
Nothing in this Section 18 should be construed as a general
consent to service of process as to which any shareholder of the Company or any
other person may rely in connection with any suit or proceeding against the
Company.
19. General. 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. This Agreement may be executed in several
counterparts, each one of which shall be an original, and all of which shall
constitute one and the same document.
In this Agreement, the masculine, feminine and neuter genders and
the singular and the plural include one another. The section headings in this
Agreement are for the convenience of the parties only and will not affect the
construction or interpretation of this Agreement. This Agreement may be amended
or modified, and the observance of any term of this Agreement may be waived,
only by a writing signed by the Company and you.
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If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed copies hereof, whereupon it
will become a binding agreement between the Company and the Underwriters
including you, all in accordance with its terms.
Very truly yours,
FLEXTRONICS INTERNATIONAL LTD.
By: /s/ ▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: President Systems Group
The foregoing Underwriting
Agreement is hereby confirmed and
accepted by us in San Francisco,
California as of the date first above written.
Banc of America Securities LLC
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC
▇▇▇▇▇▇ Brothers Inc.
Acting as Representatives of the Several
Underwriters named in the attached Schedule A
By BANC OF AMERICA SECURITIES LLC
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. PELGRIFF
-----------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. Pelgriff
Title: Managing Director