6,000,000 SHARES
DDi CORP.
COMMON STOCK
UNDERWRITING AGREEMENT
----------------------
October [ ], 2000
CREDIT SUISSE FIRST BOSTON CORPORATION,
As Representative of the Several Underwriters,
Eleven Madison Avenue,
New York, N.Y.10010-3629
Dear Sirs:
1. Introductory. DDi Corp., a Delaware corporation (the "COMPANY"),
proposes to issue and sell [ ] shares of its common stock, par
value $.01 per share ("SECURITIES") and the stockholders listed in Schedule A
hereto ("SELLING STOCKHOLDERS") propose severally to sell an aggregate of [
] outstanding shares of the Securities (such [ ] shares of the
Securities to be sold by the Company being hereinafter referred to as the "FIRM
PRIMARY SECURITIES" and such [ ] shares of the Securities to be sold
by the Selling Stockholders being hereinafter referred to as the "FIRM SECONDARY
SECURITIES" and, together, the Firm Primary Securities and the Firm Secondary
Securities being hereinafter referred to as the "FIRM SECURITIES"). Certain of
the Selling Stockholders also propose to sell to the Underwriters, at the option
of the Underwrit ers, an aggregate of not more than 900,000 additional
outstanding shares of the Company's Securities, as set forth below (such 900,000
additional shares being hereinafter referred to as the "OPTIONAL SECURITIES").
The Firm Securities and the Optional Securities are herein collectively called
the "OFFERED SECURITIES". The Company and the Selling Stockholders hereby agree
with the several Underwriters named in Schedule B hereto ("UNDERWRITERS") as
follows:
2. Representations and Warranties of the Company and the Selling
Stockholders. (a) The Company represents and warrants to, and agrees with, the
several Underwriters that:
(i) A registration statement (No. 333-45648) relating to the Offered
Securities, including a form of prospectus, has been filed with the Securities
and Exchange Commission
("COMMISSION") and either (A) has been declared effective under the Securities
Act of 1933 ("ACT") and is not proposed to be amended or (B) is proposed to be
amended by amendment or post-effective amendment. If such registration statement
(the "INITIAL REGISTRATION STATEMENT") has been declared effective, either (A)
an additional registration statement (the "ADDITIONAL REGISTRATION STATEMENT")
relating to the Offered Securities may have been filed with the Commission
pursuant to Rule 462(b) ("RULE 462(B)") under the Act and, if so filed, has
become effective upon filing pursuant to such Rule and the Offered Securities
all have been duly registered under the Act pursuant to the initial registration
statement and, if applicable, the additional registration statement or (B) such
an additional registration statement is proposed to be filed with the Commission
pursuant to Rule 462(b) and will become effective upon filing pursuant to such
Rule and upon such filing the Offered Securities will all have been duly
registered under the Act pursuant to the initial registration statement and such
additional registration statement. If the Company does not propose to amend the
initial registration statement or if an additional registration statement has
been filed and the Company does not propose to amend it, and if any post-
effective amendment to either such registration statement has been filed with
the Commission prior to the execution and delivery of this Agreement, the most
recent amendment (if any) to each such registration statement has been declared
effective by the Commission or has become effective upon filing pursuant to Rule
462(c) ("RULE 462(C)") under the Act or, in the case of the additional
registration statement, Rule 462(b). For purposes of this Agreement, "EFFECTIVE
TIME" with respect to the initial registration statement or, if filed prior to
the execution and delivery of this Agreement, the additional registration
statement means (A) if the Company has advised the Representative that it does
not propose to amend such registration statement, the date and time as of which
such registration statement, or the most recent post-effective amendment thereto
(if any) filed prior to the execution and delivery of this Agreement, was
declared effective by the Commission or has become effective upon filing
pursuant to Rule 462(c), or (B) if the Company has advised the Representative
that it proposes to file an amendment or post-effective amendment to such
registration statement, the date and time as of which such registration
statement, as amended by such amendment or post-effective amendment, as the case
may be, is declared effective by the Commission. If an additional registration
statement has not been filed prior to the execution and delivery of this
Agreement but the Company has advised the Representative that it proposes to
file one, "EFFECTIVE TIME" with respect to such additional registration
statement means the date and time as of which such registration statement is
filed and becomes effective pursuant to Rule 462(b). "EFFECTIVE DATE" with
respect to the initial registration statement or the additional registration
statement (if any) means the date of the Effective Time thereof. The initial
registration statement, as amended at its Effective Time, including all
information contained in the additional registration statement (if any) and
deemed to be a part of the initial registration statement as of the Effective
Time of the additional registration statement pursuant to the General
Instructions of the Form on which it is filed and including all information (if
any) deemed to be a part of the initial registration statement as of its
Effective Time pursuant to Rule 430A(b) ("RULE 430A(B)") under the Act, is
hereinafter referred to as the "INITIAL REGISTRATION STATEMENT". The additional
registration statement, as amended at its Effective Time, including the contents
of the initial registration statement incorporated by reference therein and
including all information (if any) deemed to be a
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part of the additional registration statement as of its Effective Time pursuant
to Rule 430A(b), is hereinafter referred to as the "ADDITIONAL REGISTRATION
STATEMENT". The Initial Registration Statement and the Additional Registration
Statement are hereinafter referred to collectively as the "REGISTRATION
STATEMENTS" and individually as a "REGISTRATION STATEMENT". The form of
prospectus relating to the Offered Securities, as first filed with the
Commission pursuant to and in accordance with Rule 424(b) ("RULE 424(B)") under
the Act or (if no such filing is required) as included in a Registration
Statement, is hereinafter referred to as the "PROSPECTUS". No document has been
or will be prepared or distributed in reliance on Rule 434 under the Act.
(ii) If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement: (A) on the Effective Date
of the Initial Registration Statement, the Initial Registration Statement
conformed in all respects to the requirements of the Act and the rules and
regulations of the Commission ("RULES AND REGULATIONS") and did not include any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading,
(B) on the Effective Date of the Additional Registration Statement (if any),
each Registration Statement conformed or will conform, in all respects to the
requirements of the Act and the Rules and Regulations and did not include, or
will not include, any untrue statement of a material fact and did not omit, or
will not omit, to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and (C) on the date of
this Agreement, the Initial Registration Statement and, if the Effective Time of
the Additional Registration Statement is prior to the execution and delivery of
this Agreement, the Additional Registration Statement each conforms, and at the
time of filing of the Prospectus pursuant to Rule 424(b) or (if no such filing
is required) at the Effective Date of the Additional Registration Statement in
which the Prospectus is included, each Registration Statement and the Prospectus
(as amended or supplemented) will conform, in all respects to the requirements
of the Act and the Rules and Regulations, and neither of such documents
includes, or will include, any untrue statement of a material fact or omits, or
will omit, to state any material fact required to be stated therein or necessary
to make the statements therein not misleading. If the Effective Time of the
Initial Registration Statement is subsequent to the execution and delivery of
this Agreement: on the Effective Date of the Initial Registration Statement, the
Initial Registration Statement and the Prospectus will conform in all respects
to the requirements of the Act and the Rules and Regulations, neither of such
documents will include any untrue statement of a material fact or will omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading, and no Addi tional Registration Statement has
been or will be filed. The two preceding sentences do not apply to statements in
or omissions from a Registration Statement or the Prospectus based upon written
information furnished to the Company by any Underwriter through the
Representative specifi cally for use therein, it being understood and agreed
that the only such information is that described as such in Section 7(d) hereof.
(iii) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware, with power
and authority (corporate and other) to own its properties and conduct its
business as described in the Prospectus; and the
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Company is duly qualified to do business as a foreign corporation in good
standing in all other jurisdictions in which its ownership or lease of property
or the conduct of its business requires such qualification.
(iv) Each subsidiary of the Company has been duly incorporated and is
an existing corporation in good standing under the laws of the jurisdiction of
its incorporation, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus; and each
subsidiary of the Company is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions in which its ownership
or lease of property or the conduct of its business requires such qualification
except where the failure to be so qualified would not individually or in the
aggregate have a material adverse effect on the condition (financial or other),
business, properties or results of operations of the Company and its
subsidiaries taken as a whole ("MATERIAL ADVERSE EFFECT"); all of the issued and
outstanding capital stock of each subsidiary of the Company has been duly
authorized and validly issued and is fully paid and nonassessable; and the
capital stock of each subsidiary owned by the Company, directly or through
subsidiaries, is owned free from liens, encumbrances and defects, except as
described in the Prospectus under the caption "Description of Indebtedness -
Dynamic Details Senior Credit Facility."
(v) As of June 30, 2000, the Company had an authorized capitalization as
set forth in the Prospectus under the heading "Capitalization" in the column
entitled "Actual" and, except as described in the Prospectus, upon completion of
the issue and sale of the Firm Securities and the use of the proceeds therefrom,
as contemplated in the Prospectus, and assuming the completion as of June 30,
2000 of the acquisition of substantially all of the assets of Automata
International, Inc. ("AUTOMATA") for a purchase price of approximately $19.5
million in cash, net of fees and expenses, pursuant to an Asset Purchase
Agreement (the "AUTOMATA PURCHASE AGREEMENT"), dated June 26, 2000, as amended
by Amendment No. 1, dated August 1, 2000, by and between Dynamic Details,
Incorporated, Virginia and Automata (the "AUTOMATA ACQUISITION"), as described
in the Prospectus (as amended or supplemented), will have the capitalization as
set forth in the columns entitled "Pro Forma Combined" and "Pro Forma As
Adjusted."
(vi) The Firm Secondary Securities, the Optional Securities and all
outstanding shares of capital stock of the Company have been duly authorized and
validly issued, and are fully paid and non-assessable and conform to the
description thereof contained in the Prospectus (as amended or supplemented);
and upon their issuance and sale pursuant to this Agreement, the Firm Primary
Securities will have been duly authorized and validly issued, fully paid and
non-assessable and will conform to the description thereof contained in the
Prospectus (as amended or supplemented); and the stockholders of the Company
have no preemptive rights with respect to the Securities.
(vii) Except as disclosed in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person that would give
rise to a valid claim
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against the Company or any Underwriter for a brokerage commission, finder's fee
or other like payment in connection with this offering.
(viii) There are no contracts, agreements or understandings between
the Company and any person granting such person the right (i) to require the
Company to file a registration statement under the Act with respect to any
securities of the Company owned or to be owned by such person or (ii) to require
the Company to include such securities in the securities registered pursuant to
the Registration Statement or (iii) to require the Company to include such
securities in any securities being registered pursuant to any other registration
statement filed by the Company under the Act, except in the case of (i) and
(iii), as described in the Prospectus and in the case of (ii) as have been
satisfied or waived.
(ix) The Securities are traded on The Nasdaq Stock Market's National
Market.
(x) No consent, approval, authorization, or order of, or filing with,
any governmental agency or body or any court is required to be obtained or made
by the Company for the consummation of the transactions contemplated by this
Agreement in connection with the sale of the Offered Securities, except such as
have been obtained and made under the Act and such as may be required under
state securities laws or by the NASD.
(xi) The (a) execution, delivery and performance of this Agreement, and
the consummation of the transactions herein contemplated (including but not
limited to the sale of the Offered Securities by the Company and the use of the
proceeds therefrom as described in the Prospectus, as amended or supplemented)
will not result in a breach or violation of any of the terms and provisions of,
or constitute a default under, (i) any statute, any rule, regulation or order of
any governmental agency or body or any court, domestic or foreign, having
jurisdiction over the Company or any subsidiary of the Company or any of their
properties, or (ii) any agreement or instrument to which the Company or any such
subsidiary is a party or by which the Company or any such subsidiary is bound or
to which any of the properties of the Company or any such subsidiary is subject,
or (iii) the charter or by-laws of the Company or any such subsidiary, except in
the case of (ii), for such breach or violation that would not, individually or
in the aggregate, have a Material Adverse Effect.
(xii) This Agreement has been duly authorized, executed and delivered
by the Company.
(xiii) Except as disclosed in the Prospectus, the Company and its
subsidiaries have good and marketable title to all real properties owned by them
and personal property reflected as owned in the financial statements described
in paragraph (xix) below and not disposed of in the ordinary course of business
since December 31, 1999, plus any personal property acquired since December 31,
1999, in each case that are material to the business of the Company and its
subsidiaries taken as a whole and in each case free from liens, encumbrances and
defects that would materially affect the value thereof or materially interfere
with the use made or to be made
5
thereof by them; the Company and its subsidiaries have good and marketable title
to all real properties and personal property acquired by them in the Automata
Acquisition pursuant to the terms of the Automata Purchase Agreement and in the
acquisition of all of the outstanding capital stock of MCM Electronics Limited
("MCM"), now known as DDi Europe Limited ("DDI EUROPE"), pursuant to the terms
of the Share Purchase Agreement (the "MCM PURCHASE AGREEMENT"), dated March 22,
2000, by and between the Company and the shareholders of MCM (the "MCM
ACQUISITION"), in each case free from liens, encumbrances and defects that would
materially affect the value thereof or materially interfere with the use made or
to be made thereof by them; and except as disclosed in the Prospectus, the
Company and its subsidiaries hold any leased real or personal property that are
material to the business of the Company and its subsidiaries, including the
property acquired in the Automata Acquisition pursuant to the terms of the
Automata Purchase Agreement and in the MCM Acquisition pursuant to the terms of
the MCM Purchase Agreement, taken as a whole, under valid and enforceable
leases, with no exceptions that would materially interfere with the use made or
to be made thereof by them.
(xiv) The Company and its subsidiaries possess adequate certificates,
authorities or permits issued by appropriate governmental agencies or bodies
necessary to conduct the business now operated by them and have not received any
notice of proceedings relating to the revocation or modification of any such
certificate, authority or permit that, if determined adversely to the Company or
any of its subsidiaries, would individually or in the aggregate have a Material
Adverse Effect.
(xv) No labor dispute with the employees of the Company or any
subsidiary exists or, to the knowledge of the Company, is imminent that might
have a Material Adverse Effect.
(xvi) The Company and its subsidiaries own, possess or can acquire on
reasonable terms, adequate trademarks, trade names and other rights to
inventions, know-how, patents, copyrights, confidential information and other
intellectual property (collectively, "INTELLECTUAL PROPERTY RIGHTS") necessary
to conduct the business now operated by them, or presently employed by them, and
have not received any notice of infringement of or conflict with asserted rights
of others with respect to any intellectual property rights that, if determined
adversely to the Company or any of its subsidiaries, would individually or in
the aggregate have a Material Adverse Effect.
(xvii) Except as disclosed in the Prospectus, neither the Company nor
any of its subsidiaries is in violation of any statute, any rule, regulation,
decision or order of any govern mental agency or body or any court, domestic or
foreign, relating to the use, disposal or release of hazardous or toxic
substances or relating to the protection or restoration of the environment or
human exposure to hazardous or toxic substances (collectively, "ENVIRONMENTAL
LAWS"), owns or operates any real property contaminated with any substance that
is subject to any environmental laws, is liable for any off-site disposal or
contamination pursuant to any environmental laws, or is subject to any claim
relating to any environmental laws, which violation, contamination,
6
liability or claim would individually or in the aggregate have Material Adverse
Effect; and the Company is not aware of any pending investigation which might
lead to such a claim.
(xviii) Except as disclosed in the Prospectus, there are no pending
actions, suits or proceedings against or affecting the Company, any of its
subsidiaries or any of their respective properties that, if determined adversely
to the Company or any of its subsidiaries, would individually or in the
aggregate have a Material Adverse Effect, or would materially and adversely
affect the ability of the Company to perform its obligations under this
Agreement, or which are otherwise material in the context of the sale of the
Offered Securities; and no such actions, suits or proceedings are, to the
Company's knowledge, threatened or contemplated.
(xix) Each of PricewaterhouseCoopers LLP, who have certified the
financial statements of the Company, KPMG Audit Plc, who have certified the
financial statements of DDi Europe, and KPMG, who have certified the financial
statements of Automata included in the Registration Statements, are independent
public accountants as required by the Act and the Rules and Regulations. The
financial statements included in each Registration Statement and the Prospectus
present fairly, in all material respects, the financial position of the Company
and its consolidated subsidiaries as of the dates shown and their results of
operations and cash flows for the periods shown, and such financial statements
have been prepared in conformity with the generally accepted accounting
principles in the United States applied on a consistent basis; and the pro forma
consolidated financial data contained in each Registration Statement and the
Prospectus have been prepared on a basis consistent with the historical
financial statements, includes all material adjustments to the historical
financial information required by Rule 11-02 of Regulation S-X under the Act and
the Securities Exchange Act of 1934 ("EXCHANGE ACT") to reflect the transactions
described therein the assumptions used in preparing the pro forma financial
statements and other data (including, but not limited to "adjusted EBITDA")
included in each Registration Statement and the Prospectus provide a reasonable
basis for presenting the significant effects directly attributable to the
transactions or events described therein, the related pro forma adjustments give
appropriate effect to those assumptions, and the pro forma columns therein
reflect the proper application of those adjustments to the corresponding
historical financial statement amounts.
(xx) Except as disclosed in the Prospectus, since the date of the
latest audited financial statements included in the Prospectus there has been no
material adverse change, nor any development or event involving a prospective
material adverse change, in the condition (financial or other), business,
properties or results of operations of the Company and its subsid iaries taken
as a whole, and, except as disclosed in or contemplated by the Prospectus, there
has been no dividend or distribution of any kind declared, paid or made by the
Company on any class of its capital stock.
(xxi) The Company is not and, after giving effect to the offering and
sale of the Offered Securities and the application of the proceeds thereof as
described in the Prospectus, will not be an "investment company" as defined in
the Investment Company Act of 1940.
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(xxii) Neither the Company nor any of its subsidiaries is in violation
of its charter or by-laws, as the case may be, or in default (or would be in
default with notice or lapse of time, or both) in the performance or observance
of any material obligation, agreement, covenant or condition contained in any
material bond, debenture, note or other evidence of indebtedness or in any
material contract, indenture, mortgage, deed of trust, loan or credit agreement,
lease, joint venture or other agreement or instrument to which the Company or
any of its subsidiaries is a party or by which any of their properties may be
bound, which default or defaults would have a Material Adverse Effect, or in
violation of any law, order, rule, regulation, writ, injunction, judgment or
decree of any court or governmental agency or body, the violation of which would
have a Material Adverse Effect.
(xxiii) Neither the Company nor any of its directors, officers or
affiliates (as defined in the Rules and Regulations) has taken or will take,
directly or indirectly, any action designed to cause or result in, or which
constitutes or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the shares of the Securities to
facilitate the sale or resale of the Offered Securities.
(xxiv) The Company and its subsidiaries have filed all federal, state,
local and foreign tax returns that have been required to be filed and have paid
all taxes shown thereon and all assessments received by them or any of them to
the extent that such taxes have become due and are not being contested in good
faith. Except as disclosed in the Registration Statement and the Prospectus,
there is no tax deficiency that has been or might reasonably be expected to be
asserted or, to the Company's knowledge, threatened against the Company or any
of its subsidiar ies, that would have a Material Adverse Effect.
(xxv) No relationship, direct or indirect, exists between or among the
Company or any of its affiliates, on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company or any of its subsidiaries,
on the other hand, that is required by the Act to be described in the
Registration Statement and the Prospectus that is not so described.
(xxvi) Each employee benefit plan, within the meaning of Section 3(3)
of the Employee Retirement Income Securities Act of 1974, as amended ("ERISA"),
that is maintained, administered or contributed to by the Company or any of its
subsidiaries for employees or former employees of the Company or any of its
subsidiaries has been maintained in compliance, in all material respects, with
its respective terms and the requirements of any applicable statutes, order,
rules and regulations, including but not limited to ERISA and the Internal
Revenue Code of 1986, as amended (the "Code"), except for such non-compliance
that would not result in a Material Adverse Effect. No prohibited transaction,
within the meaning of Section 406 of ERISA or Section 4975 of the Code, has
occurred with respect to any such plan, excluding transactions effected pursuant
to a statutory or administrative exemption or transactions that would not have a
Material Adverse Effect. For each such plan that is subject to the funding rules
of Section 412 of the Code or Section 302 of ERISA, no "accumulated funding
deficiency", as
8
defined in Section 412 of the Code, has been incurred, whether or not waived,
and the fair market value of the assets of each such plan (excluding for these
purposes accrued but unpaid contribu tions) exceeded the present value of all
benefits accrued under such plan determined using reasonable actuarial
assumptions.
(xxvii) The Company and each of its subsidiaries maintain a system of
internal accounting controls that, taken as a whole, are sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with management's
general or specific authoriza tion; and (iv) the recorded accountability for
assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(xxviii) The Company and each of its subsidiaries maintain insurance
of the types and in the amounts that the Company reasonably deems adequate for
their respective business, including, without limitation, insurance coverage on
real and personal property owned or leased by them against theft, damage,
destruction, acts of vandalism and all other material risks customarily insured
against, all of which insurance is in full force and effect. Neither the Company
nor any of its subsidiaries has any reason to believe that it will not be able
to renew existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary to continue
its respective business.
(xxix) There are no contracts or documents which are required to be
described in the Registration Statement or the Prospectus or to be filed or
incorporated by reference as exhibits thereto which have not been so described
and filed or incorporated by reference as required.
(b) Each Selling Stockholder severally represents and warrants to, and
agrees with, the several Underwriters that:
(i) Such Selling Stockholder has and on each Closing Date hereinafter
mentioned will have valid and unencumbered title to the Firm Secondary
Securities and the Optional Securities to be delivered by such Selling
Stockholder on such Closing Date and full right, power and authority to enter
into this Agreement and to sell, assign, transfer and deliver the Firm Secondary
Securities and the Optional Securities to be delivered by such Selling Stock
holder on such Closing Date hereunder; and upon the delivery of and payment for
the Firm Secondary Securities and the Optional Securities on each Closing Date
hereunder the several Underwriters will acquire valid and unencumbered title to
the Firm Secondary Securities and the Optional Securities to be delivered by
such Selling Stockholder on such Closing Date.
(ii) If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement: (A) on the Effective
Date of the Initial Registration Statement, the Initial Registration Statement
conformed in all respects to the requirements of the
9
Act and the Rules and Regulations and did not include any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, (B) on the Effective
Date of the Additional Registration Statement (if any), each Registration
Statement conformed, or will conform, in all respects to the requirements of the
Act and the Rules and Regulations did not include, or will not include, any
untrue statement of a material fact and did not omit, or will not omit, to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading, and (C) on the date of this Agreement, the
Initial Registration Statement and, if the Effective Time of the Additional
Registration Statement is prior to the execution and delivery of this Agreement,
the Additional Registration Statement each conforms, and at the time of filing
of the Prospectus pursuant to Rule 424(b) or (if no such filing is required) at
the Effective Date of the Additional Registration Statement in which the
Prospectus is included, each Registration Statement and the Prospectus will
conform, in all respects to the requirements of the Act and the Rules and
Regulations, and neither of such documents includes, or will include, any untrue
statement of a material fact or omits, or will omit, to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading. If the Effective Time of the Initial Registration Statement is
subsequent to the execution and delivery of this Agreement: on the Effective
Date of the Initial Registration Statement, the Initial Registration Statement
and the Prospectus will conform in all respects to the requirements of the Act
and the Rules and Regulations, neither of such documents will include any untrue
statement of a material fact or will omit to state any material fact required to
be stated therein or necessary to make the statements therein not misleading.
With respect to any Selling Stockholder other than ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("▇▇▇▇▇▇"),
Chairman of the Board of Directors of the Company, and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
("▇▇▇▇▇"), Chief Financial Officer of the Company, the two preceding sentences
apply only to the extent that any statements in or omissions from a Registration
Statement or the Prospectus are based on written information furnished to the
Company by such Selling Stockholder specifically for use therein, it being
understood and agreed that the only such information furnished by any such
Selling Stockholder consists of the information under the caption "Principal and
Selling Stockholders" in the Prospectus.
(iii) Except as disclosed in the Prospectus, there are no contracts,
agreements or understandings between such Selling Stockholder and any person
that would give rise to a valid claim against such Selling Stockholder or any
Underwriter for a brokerage commission, finder's fee or other like payment in
connection with this offering.
(iv) The execution, delivery and performance of the Custody Agreement
and this Agreement and the consummation of the transactions therein and herein
contemplated will not result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any statute, any rule, regulation
or order of any governmental agency or body or any court having jurisdiction
over any Selling Stockholder or any of its properties or any agreement or
instrument to which any Selling Stockholder is a party or by which any Selling
Stockholder is bound or to
10
which any of the properties of any Selling Stockholder is subject, or the
charter or by-laws of any Selling Stockholder which is a corporation.
3. Purchase, Sale and Delivery of Offered Securities. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company and each Selling Stockholder
agree, severally and not jointly, to sell to each Underwriter, and each
Underwriter agrees, severally and not jointly, to purchase from the Company and
each Selling Stockholder, at a purchase price of $[ ] per share, that
number of Firm Securities (rounded up or down, as determined by Credit Suisse
First Boston Corporation ("CSFBC") in its discretion, in order to avoid
fractions) obtained by multiplying [ ] Firm Securities in the case of
the Company and the number of Firm Securities set forth opposite the name of
such Selling Stockholder in Schedule A hereto, in the case of a Selling
Stockholder, in each case by a fraction the numerator of which is the number of
Firm Securities set forth opposite the name of such Underwriter in Schedule B
hereto and the denominator of which is the total number of Firm Securities.
Certificates in negotiable form for the Firm Secondary Securities and the
Optional Securities to be sold by the Selling Stockholders hereunder have been
placed in custody, for delivery under this Agreement, under Custody Agreements
made with [ ], as custodian ("CUSTODIAN"). Each Selling
Stockholder agrees that the shares represented by the certificates held in
custody for such Selling Stockholder under such Custody Agreements are subject
to the interests of the Underwriters hereunder, that the arrangements made by
such Selling Stockholder for such custody are to that extent irrevocable, and
that the obligations of Selling Stockholder hereunder shall not be terminated by
operation of law, whether by the death of such individual Selling Stockholder or
the occurrence of any other event, or in the case of a trust, by the death of
any trustee or trustees or the termination of such trust. If any individual
Selling Stockholder or any such trustee or trustees should die, or if any other
such event should occur, or if any of such trusts should terminate, before the
delivery of the Firm Secondary Securities or the Optional Securities hereunder,
certificates for such Firm Secondary Securities or Optional Securities shall be
delivered by the Custodian in accordance with the terms and conditions of this
Agreement as if such death or other event or termination had not occurred,
regardless of whether or not the Custodian shall have received notice of such
death or other event or termination.
The Company and the Custodian will deliver the Firm Securities to the
Representative for the accounts of the Underwriters, against payment of the
purchase price in Federal (same day) funds by official bank check or checks or
wire transfer to an account at a bank acceptable to CSFBC drawn to the order of
the Company in the case of [ ] shares of Firm Primary Securities and
the Custodian in the case of [ ] shares of Firm Secondary Securities,
at the office of Ropes & ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇,
at 9:30 A.M., eastern standard time, on [ ], 2000, or at such other time not
later than seven full business days thereafter as CSFBC and the Company
determine, such time being herein referred to as the "FIRST CLOSING DATE". The
certificates for the Firm Securities so to be delivered will be in definitive
form, in such denominations and registered in such names as CSFBC requests and
11
will be made available for checking and packaging at the above office of
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP at least 24 hours prior to the First
Closing Date.
In addition, upon written notice from CSFBC given to the Company and
attorney-in-fact for the Selling Stockholders from time to time not more than 30
days subsequent to the date of the Prospectus, the Underwriters may purchase all
or less than all of the Optional Securities at the purchase price per Security
to be paid for the Firm Securities. The Selling Stockholders agree, severally
and not jointly, to sell to the Underwriters the respective numbers of Optional
Securities obtained by multiplying the number of Optional Securities specified
in such notice by a fraction the numerator of which is the number of shares set
forth opposite the names of such Selling Stockholders in Schedule A hereto under
the caption "Number of Optional Securities to be Sold" and the denominator of
which is the total number of Optional Securities (subject to adjustment by CSFBC
to eliminate fractions). Such Optional Securities shall be purchased from each
Selling Stockholder for the account of each Underwriter in the same proportion
as the number of Firm Securities set forth opposite such Underwriter's name
bears to the total number of Firm Securities (subject to adjustment by CSFBC to
eliminate fractions) and may be pur chased by the Underwriters only for the
purpose of covering over-allotments made in connection with the sale of the Firm
Securities. No Optional Securities shall be sold or delivered unless the Firm
Securities previously have been, or simultaneously are, sold and delivered. The
right to purchase Optional Securities or any portion thereof may be exercised
from time to time and to the extent not previously exercised may be surrendered
and terminated at any time upon notice by CSFBC to the Company and the Selling
Stockholders.
Each time for the delivery of and payment for the Optional Securities,
being herein referred to as an "OPTIONAL CLOSING DATE", which may be the First
Closing Date (the First Closing Date and each Optional Closing Date, if any,
being sometimes referred to as a "CLOSING DATE"), shall be determined by CSFBC
but shall be not later than five full business days after written notice of
election to purchase Optional Securities is given. The Custodian will deliver
the Optional Securities being purchased on each Optional Closing Date to the
Representative for the accounts of the several Underwriters, against payment of
the purchase price therefor in Federal (same day) funds by official bank check
or checks or wire transfer to an account at a bank acceptable to CSFBC drawn to
the order of the Custodian, at the above office of Skadden, Arps, Slate, ▇▇▇▇▇▇▇
& ▇▇▇▇ LLP. The certificates for the Optional Securities being purchased on
each Optional Closing Date will be in definitive form, in such denominations and
registered in such names as CSFBC requests upon reasonable notice prior to such
Optional Closing Date and will be made available for checking and packaging at
the above office of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP at a reasonable
time in advance of such Optional Closing Date.
4. Offering by Underwriters. It is understood that the several Underwriters
propose to offer the Offered Securities for sale to the public as set forth in
the Prospectus.
5. Certain Agreements of the Company and the Selling Stockholders. The
Company agrees with the several Underwriters and the Selling Stockholders that:
12
(a) If the Effective Time of the Initial Registration Statement is prior
to the execution and delivery of this Agreement, the Company will file the
Prospectus with the Commission pursuant to and in accordance with subparagraph
(1) (or, if applicable and if consented to by CSFBC, subparagraph (4)) of Rule
424(b) not later than the earlier of (A) the second business day following the
execution and delivery of this Agreement or (B) the fifteenth business day after
the Effective Date of the Initial Registration Statement.
The Company will advise CSFBC promptly of any such filing pursuant to Rule
424(b). If the Effective Time of the Initial Registration Statement is prior to
the execution and delivery of this Agreement and an additional registration
statement is necessary to register a portion of the Offered Securities under the
Act but the Effective Time thereof has not occurred as of such execution and
delivery, the Company will file the additional registration statement or, if
filed, will file a post-effective amendment thereto with the Commission pursuant
to and in accordance with Rule 462(b) on or prior to 10:00 P.M., New York time,
on the date of this Agreement or, if earlier, on or prior to the time the
Prospectus is printed and distributed to any Underwriter, or will make such
filing at such later date as shall have been consented to by CSFBC.
(b) The Company will advise CSFBC promptly of any proposal to amend or
supplement the initial or any additional registration statement as filed or the
related prospectus or the Initial Registration Statement, the Additional
Registration Statement (if any) or the Prospectus and will not effect such
amendment or supplementation without CSFBC's consent, which consent will not be
withheld unreasonably; and the Company will also advise CSFBC promptly of the
effective ness of each Registration Statement (if its Effective Time is
subsequent to the execution and delivery of this Agreement) and of any amendment
or supplementation of a Registration Statement or the Prospectus and of the
institution by the Commission of any stop order proceed ings in respect of a
Registration Statement and will use its reasonable best efforts to prevent the
issuance of any such stop order and to obtain as soon as possible its lifting,
if issued.
(c) If, at any time when a prospectus relating to the Offered Securities
is required to be delivered under the Act in connection with sales by any
Underwriter or dealer, any event occurs as a result of which the Prospectus as
then amended or supplemented would include an untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or if it is necessary at any time to amend the Prospectus to comply
with the Act, the Company will promptly notify CSFBC of such event and will
promptly prepare and file with the Commission, at its own expense, an amendment
or supplement which will correct such statement or omission or an amendment
which will effect such compliance. Neither CSFBC's consent to, nor the
Underwriters' delivery of, any such amendment or supplement shall constitute a
waiver of any of the conditions set forth in Section 6.
(d) As soon as practicable, but not later than the Availability Date (as
defined below), the Company will make generally available to its securityholders
an earnings statement
13
(which need not be audited) covering a period of at least 12 months beginning
after the Effective Date of the Initial Registration Statement (or, if later,
the Effective Date of the Additional Registration Statement) which will satisfy
the provisions of Section 11(a) of the Act. For the purpose of the preceding
sentence, "AVAILABILITY DATE" means the 45th day after the end of the fourth
fiscal quarter following the fiscal quarter that includes such Effective Date,
except that, if such fourth fiscal quarter is the last quarter of the Company's
fiscal year, "Availability Date" means the 90th day after the end of such fourth
fiscal quarter.
(e) The Company will furnish to the Representative copies of each
Registration Statement, four of which will be signed and will include all
exhibits, each related preliminary prospectus, and, so long as a prospectus
relating to the Offered Securities is required to be delivered under the Act in
connection with sales by any Underwriter or dealer, the Prospectus and all
amendments and supplements to such documents, in each case in such quantities as
CSFBC requests. The Prospectus shall be so furnished on or prior to 3:00 P.M.,
New York time, on the business day following the later of the execution and
delivery of this Agreement or the Effective Time of the Initial Registration
Statement. All other such documents shall be so furnished as soon as available.
The Company will pay the expenses of printing and distributing to the
Underwriters all such documents.
(f) The Company will arrange for the qualification of the Offered
Securities for sale under the laws of such jurisdictions as CSFBC designates and
will continue such qualifications in effect so long as required for the
distribution, provided that in connection therewith the Company shall not be
required to qualify as a foreign corporation or to take any action that would
subject it to a general consent to service of process or taxation in any such
jurisdiction.
(g) During the period of five years hereafter, the Company will furnish to
the Represen tative and, upon request, to each of the other Underwriters, as
soon as practicable after the end of each fiscal year, a copy of its annual
report to stockholders for such year; and the Company will furnish to the
Representative (i) as soon as available, a copy of each report and any
definitive proxy statement of the Company filed with the Commission under the
Exchange Act or mailed to stockholders, and (ii) from time to time, such other
information concerning the Company as CSFBC may reasonably request.
(h) For a period of 90 days after the date of the public offering of the
Offered Securities, the Company will not offer, sell, contract to sell, pledge
or otherwise dispose of, directly or indirectly, or file with the Commission a
registration statement under the Act relating to, any additional shares of its
Securities or securities convertible into or exchangeable or exercisable for any
shares of its Securities, or publicly disclose the intention to make any such
offer, sale, pledge, disposition or filing, without the prior written consent of
CSFBC, except grants of employee stock options pursuant to the terms of a plan
in effect on the date hereof and issuances of Securities pursuant to the
exercise of such options or the exercise of any other employee stock options
outstanding on the date hereof.
14
(i) Each Selling Stockholder agrees, for a period of 90 days after the
date of the public offering of the Offered Securities, not to offer, sell,
contract to sell, pledge or otherwise dispose of, directly or indirectly, any
additional shares of the Securities of the Company or securities convertible
into or exchangeable or exercisable for any shares of Securities, enter into a
transaction which would have the same effect, or enter into any swap, hedge or
other arrange ment that transfers, in whole or in part, any of the economic
consequences of ownership of the Securities, whether any such aforementioned
transaction is to be settled by delivery of the Securities or such other
securities, in cash or otherwise, or publicly disclose the intention to make any
such offer, sale, pledge or disposition, or enter into any such transaction,
swap, hedge or other arrangement, without, in each case, the prior written
consent of CSFBC; provided, however (i) that any Securities acquired in the
open market will not be subject to such restric tions and (ii) that a transfer
of Securities to a family member, affiliate, trust or as a bona fide gift may be
made so long as the transferee agrees to be bound in writing by the restriction
contained in this Section 5(i).
(j) The Company and the Selling Stockholders agree with the several
Underwriters that (i) the Company will pay all expenses incident to the
performance of the obligations of the Company and the Selling Stockholders, as
the case may be, under this Agreement, for any filing fees and other expenses
(including reasonable fees and disbursements of counsel) in connection with
qualification of the Offered Securities for sale under the laws of such
jurisdictions as CSFBC designates, subject to paragraph (f) above, and the
printing of memoranda relating thereto, for the filing fee incident to, and the
reasonable fees and disbursements of counsel to the Underwriters in connection
with, the review by the National Association of Securities Dealers, Inc. (the
"NASD") of the Offered Securities, for any travel expenses of the Company's
officers and employees and any other expenses of the Company in connection with
attending or hosting meetings with prospective purchasers of the Offered
Securities and for expenses incurred in distributing preliminary prospectuses
and the Prospectus (including any amendments and supplements thereto) to the
Underwriters and that (ii) the Selling Stockholders will pay for any transfer
taxes on the sale by the Selling Stockholders of the Offered Securities to the
Underwriters.
(k) Each Selling Stockholder agrees to deliver to CSFBC, attention:
Transactions Advisory Group on or prior to the First Closing Date a properly
completed and executed United States Treasury Department Form W-9 (or other
applicable form or statement specified by Treasury Department regulations in
lieu thereof).
(l) The amendment to the Credit Agreement, as Amended and Restated
as of August 28, 1998 and as amended as of March 22, 2000, relating to the use
of proceeds from the offering of the Firm Primary Securities, will become
effective on or prior to the First Closing Date.
15
6. Conditions of the Obligations of the Underwriters. The obligations of the
several Underwriters to purchase and pay for the Firm Securities on the First
Closing Date and the Optional Securities to be purchased on each Optional
Closing Date will be subject to the accuracy of the representations and
warranties on the part of the Company and the Selling Stockholders herein, to
the accuracy of the statements of Company officers made pursuant to the
provisions hereof, to the performance by the Company and the Selling
Stockholders of their obligations hereunder and to the following additional
conditions precedent:
(a) The Representative shall have received a letter, dated the date of
delivery thereof (which, if the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement, shall be on
or prior to the date of this Agreement or, if the Effective Time of the Initial
Registration Statement is subsequent to the execution and delivery of this
Agreement, shall be prior to the filing of the amendment or post-effective
amendment to the registration statement to be filed shortly prior to such
Effective Time), of PricewaterhouseCoopers LLP confirming that they are
independent public accountants within the meaning of the Act and the applicable
published Rules and Regulations thereunder and stating to the effect that:
(i) in their opinion the financial statements examined by them and
included in the Registration Statements comply as to form in all material
respects with the applicable accounting requirements of the Act and the related
published Rules and Regulations;
(ii) they have performed the procedures specified by the American
Institute of Certified Public Accountants for a review of interim financial
information as described in Statement of Auditing Standards No. 71, Interim
Financial Information, on the unaudited financial statements included in the
Registration Statements;
(iii) on the basis of the review referred to in clause (ii) above, a
reading of the latest available interim financial statements of the Company,
inquiries of officials of the Company who have responsibility for financial and
accounting matters and other specified procedures, nothing came to their
attention that caused them to believe that:
(A) the unaudited financial statements included in the Registration
Statements do not comply as to form in all material respects with the applicable
accounting requirements of the Act and the related published Rules and
Regulations or any material modifications should be made to such unaudited
financial statements for them to be in conformity with generally accepted
accounting principles;
(B) the unaudited consolidated net sales, net operating income, net
income and net income per share amounts of the Company for the sixth-month
periods ended June 30, 1999 and June 30, 2000 included in the Prospectus do not
agree with the amounts set forth in the unaudited consolidated financial
statements for those same periods or were not determined on a
16
basis substantially consistent with that of the corresponding amounts in the
audited statements of income;
(C) at the date of the latest available balance sheet read by such
accountants, or at a subsequent specified date not more than three business days
prior to the date of this Agreement, there was any change in the capital stock
or any increase in long-term debt, or decrease in net current assets (working
capital) of the Company and its consolidated subsidiaries, as compared with
amounts shown on the latest balance sheet included in the Prospectus; or
(D) for the period from the closing date of the latest income
statement included in the Prospectus to the closing date of the latest available
income statement read by such accountants there were any decreases, as compared
with the corresponding period of the previous year, in consolidated net sales or
increases in the amounts of net loss;
except in all cases set forth in clauses (A) and (B) above for changes,
increases or decreases which the Prospectus discloses have occurred or may occur
or which are described in such letter;
(iv) on the basis of a reading of the unaudited pro forma consolidated
financial statements included in the Registration Statements, carrying out
certain specified procedures that would not necessarily reveal matters of
significance with respect to the comments set forth in this paragraph (iii),
inquiries of certain officials of the Company and its consolidated subsidiaries
who have responsibility for financial and accounting matters and proving the
arithmetic accuracy of the application of the pro forma adjustments to the
historical amounts in the unaudited pro forma consolidated financial statements,
nothing came to their attention that caused them to believe that the unaudited
pro forma consolidated financial statements do not comply in form in all
material respects with the applicable accounting requirements of Rule 11-02 of
Regulation S-X or that the pro forma adjustments have not been properly applied
to the historical amounts in the compilation of such statements; and
(v) they have compared specified dollar amounts (or percentages derived
from such dollar amounts) and other financial information contained in the
Registration Statements (in each case to the extent that such dollar amounts,
percentages and other financial information are derived from the general
accounting records of the Company and its subsidiaries subject to the internal
controls of the Company's accounting system or are derived directly from such
records by analysis or computation) with the results obtained from inquiries, a
reading of such general accounting records and other procedures specified in
such letter and have found such dollar amounts, percentages and other financial
information to be in agreement with such results, except as otherwise specified
in such letter.
For purposes of this subsection, (i) if the Effective Time of the Initial
Registration Statement is subsequent to the execution and delivery of this
Agreement, "REGISTRATION STATEMENTS" shall mean the initial registration
statement as proposed to be amended by the amendment or post-effective amendment
to be filed shortly prior to its Effective Time, (ii) if the Effective Time of
17
the Initial Registration Statement is prior to the execution and delivery of
this Agreement but the Effective Time of the Additional Registration Statement
is subsequent to such execution and delivery, "REGISTRATION STATEMENTS" shall
mean the Initial Registration Statement and the additional registration
statement as proposed to be filed or as proposed to be amended by the post-
effective amendment to be filed shortly prior to its Effective Time, and (iii)
"PROSPECTUS" shall mean the prospectus included in the Registration Statements.
(b) The Representative shall have received a letter, dated the date of
delivery thereof (which, if the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement, shall be on
or prior to the date of this Agreement or, if the Effective Time of the Initial
Registration Statement is subsequent to the execution and delivery of this
Agreement, shall be prior to the filing of the amendment or post-effective
amendment to the registration statement to be filed shortly prior to such
Effective Time), of KPMG LLP confirm ing that they are independent public
accountants within the meaning of the Act and the applica ble published Rules
and Regulations thereunder with respect to Automata and such other matters as
shall be reasonably requested by the Underwriters and agreed to by KPMG LLP.
(c) The Representative shall have received a letter, dated the date of
delivery thereof (which, if the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement, shall be on
or prior to the date of this Agreement or, if the Effective Time of the Initial
Registration Statement is subsequent to the execution and delivery of this
Agreement, shall be prior to the filing of the amendment or post-effective
amendment to the registration statement to be filed shortly prior to such
Effective Time), of KPMG Audit Plc confirming that they are independent public
accountants within the meaning of the Act and the applicable published Rules and
Regulations thereunder with respect to DDi Europe, formerly known as MCM (and
its predecessor ▇▇▇▇▇▇▇ Limited) and such other matters as shall be reasonably
requested by the Underwriters and agreed to by KPMG Audit Plc.
(d) If the Effective Time of the Initial Registration Statement is not
prior to the execution and delivery of this Agreement, such Effective Time shall
have occurred not later than 10:00 P.M., New York time, on the date of this
Agreement or such later date as shall have been consented to by CSFBC. If the
Effective Time of the Additional Registration Statement (if any) is not prior to
the execution and delivery of this Agreement, such Effective Time shall have
occurred not later than 10:00 P.M., New York time, on the date of this Agreement
or, if earlier, the time the Prospectus is printed and distributed to any
Underwriter, or shall have occurred at such later date as shall have been
consented to by CSFBC. If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement, the
Prospectus shall have been filed with the Commission in accordance with the
Rules and Regulations and Section 5(a) of this Agreement. Prior to such Closing
Date, no stop order suspending the effectiveness of a Registration Statement
shall have been issued and no proceedings for that purpose shall have been
instituted or, to the knowledge of the Company or the Representative, shall be
contemplated by the Commission.
18
(e) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred (i) any change, or any development or event involving a
prospective change, in the condition (financial or other), business, properties
or results of operations of the Company and its subsidiaries taken as one
enterprise which, in the judgment of a majority in interest of the Underwriters
including the Representative, is material and adverse and makes it impractical
or inadvisable to proceed with completion of the public offering or the sale of
and payment for the Offered Securities; (ii) any downgrading in the rating of
any debt securities of the Company by any "nationally recognized statistical
rating organization" (as defined for purposes of Rule 436(g) under the Act), or
any public announcement that any such organization has under surveillance or
review its rating of any debt securities of the Company (other than an announce
ment with positive implications of a possible upgrading, and no implication of a
possible downgrading, of such rating); (iii) any material suspension or material
limitation of trading in securities generally on the New York Stock Exchange,
The Nasdaq Stock Market's National Market, or any setting of minimum prices for
trading on such exchange, or any suspension of trading of any securities of the
Company on any exchange or in the over-the-counter market; (iv) any banking
moratorium declared by U.S. Federal, New York or California authorities; or (v)
any outbreak or escalation of major hostilities in which the United States is
involved, any declaration of war by Congress or any other substantial national
or international calamity or emergency if, in the judgment of a majority in
interest of the Underwriters including the Representative, the effect of any
such outbreak, escalation, declaration, calamity or emergency makes it
impractical or inadvisable to proceed with completion of the public offering or
the sale of and payment for the Offered Securities.
(f) The Representative shall have received an opinion, dated such Closing
Date, of Ropes & ▇▇▇▇, counsel for the Company and ▇▇▇▇ Capital Fund V, L.P.,
▇▇▇▇ Capital Fund V-B, L.P., BCIP Associates, L.P. and BCIP Trust Associates,
L.P. (collectively, the "BAIN ENTITIES") and RGIP, L.L.C. ("RGIP"), to the
effect that:
(i) The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware, with corporate power to
own its properties and conduct its business as described in the Prospectus, and
is qualified as a foreign corporation in California.
(ii) Each of the Company's Delaware subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and each such subsidiary is qualified as a foreign corporation in each
jurisdiction listed in an attached schedule.
(iii) The authorized, issued and outstanding capital stock of the
Company is as set forth in the capitalization table contained in the Prospectus,
except for issuances or forfeitures subsequent to the date of the information
provided in such table, if any, pursuant to the Company's stock plans. The
Offered Securities delivered on such Closing Date and all outstanding shares of
capital stock of the Company have been duly authorized and validly
19
issued and are fully paid and nonassessable and conform to the description
thereof contained in the Prospectus.
(iv) Each ▇▇▇▇ Entity and RGIP had partnership or limited liability
power and authority to sell, assign, transfer and deliver the Offered Securities
delivered by each ▇▇▇▇ Entity and RGIP on such Closing Date hereunder; and,
assuming that neither the Representa tive nor any Underwriter has notice of any
adverse claims with respect to the share certificate numbers listed on Exhibit 1
hereto registered in the names listed on Exhibit 1 hereto and evidencing the
Offered Securities to be sold by each Selling Stockholder then, upon delivery to
the Representative of such certificates indorsed to the Representative or
indorsed in blank by an effective indorsement, the Representative will acquire
its interest in the securities represented by such certificates free of any
adverse claims under Section 8-303 of the Uniform Commercial Code as in effect
on the date hereof in the State of Massachusetts.
(v) The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
(vi) The issuance and sale by the Company of the Offered Securities
delivered on such Closing Date, the performance by the Company of its
obligations under the Under writing Agreement, the use of the proceeds therefrom
as described in the Prospectus and the performance by the Selling Stockholders
of their obligations under the Custody Agreement will not (i) violate the
Certificate of Incorporation or By-Laws of the Company, (ii) breach or violate
or result in a default under any agreement or instrument listed or incorporated
by reference as an Exhibit to the Registration Statement or on an attached
schedule, or (iii) violate any applicable Massachusetts or federal law or
regulation or the Delaware General Corpora tion Law or, to such counsel's
knowledge, any order, writ, injunction or decree of any jurisdiction, court or
governmental instrumentality binding upon the Company or any of its properties,
except that such counsel expresses no opinion as to state securities or blue sky
laws or as to compliance with the antifraud provisions of federal and state
securities laws.
(vii) No authorizations or consents of or filings with any governmental
entity are required under any applicable Massachusetts or federal law or
regulation or the Delaware General Corporation Law to permit the Company or any
Selling Stockholder to perform its obligations under the Underwriting Agreement
or the Custody Agreement in connection with the sale of the Offered Securities,
except such as may be required under state securities or blue sky laws, as to
which such counsel expresses no opinion, and except for such as have been
obtained under the Act.
(viii) To such counsel's knowledge, no holder of any security of the
Company has the right to require registration of Securities in connection with
the registration of the Offered Securities, except as has been satisfied or
waived.
20
(ix) The stockholders of the Company have no preemptive rights under
the Certificate of Incorporation or By-Laws of the Company, the Delaware General
Corporation Law, or any agreement or instrument listed as an Exhibit to the
Registration Statement or on an attached schedule.
(x) Except as disclosed in or specifically contemplated by the
Registration Statement and the Prospectus, to such counsel's knowledge, there
are no outstanding options or warrants or other rights calling for the issuance
of any shares of capital stock of the Company or any security convertible into
or exchangeable for capital stock of the Company.
(xi) The Company is not, and after giving effect to the offering and
sale of the Offered Securities and the application of the proceeds thereof, as
described in the Prospectus, will not be, subject to regulation as an
"investment company" under the Investment Company Act of 1940, as amended.
(xii) Dynamic Details, Incorporated owns, directly or indirectly, all
of the issued and outstanding capital stock of Dynamic Details, Incorporated
Silicon Valley based on a review of the stock transfer records of such
corporation.
(xiii) The Offered Securities are traded on The Nasdaq Stock Market's
National Market.
(xiv) The Initial Registration Statement became effective on [ ], 2000.
Such counsel does not know of the issuance of any stop order suspending the
effectiveness of the Initial Registration Statement by the Commission or of any
proceeding for that purpose under the Act.
In addition, in the course of the preparation by the Company of the
Registration Statement and the Prospectus, such counsel has participated in
discussions with the Underwriters' representatives and those of the Company
and its independent accountants, in which the business and affairs of the
Company and the contents of the Registration Statement and the Prospectus were
discussed. On the basis of information that such counsel has gained in the
course of such counsel's representation of the Company in connection with its
preparation of the Registration Statement and the Prospectus and such
counsel's participation in the discussions referred to above, such counsel
believes that the Registration Statement, as of its effective date, and the
Prospectus, as of its date, complied as to form in all material respects with
the requirements of the Act and the published rules and regulations of the
Commission thereunder, and such counsel does not know of any legal or
governmental proceeding to which the Company or any of its subsidiaries is a
party or to which any of its property is subject required to be described in
the Prospectus which is not so described, nor of any contract or other
document of a character required to be described in the Prospectus or to be
filed as an exhibit to the Registration Statement which is not so described or
filed. Further, based on such information and participation,
21
nothing that has come to such counsel's attention has caused such counsel to
believe that as of its effective date the Registration Statement contained any
untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading, or that the Prospectus as of its date or as of the date of such
opinion contained or contains any untrue statement of a material fact or
omitted or omits to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. Such counsel expresses no opinion, however, as to the financial
statements, including the notes and schedules thereto, or any other financial
or accounting information set forth or referred to in the Registration
Statement or the Prospectus. The limitations inherent in the independent
verification of factual matters and the character of the determinations
involved in such counsel's review are such that such counsel does not assume
any responsibility for the accuracy, complete ness or fairness of the
statements made or the information contained in the Registration Statement or
Prospectus except for those made under the captions "Description of Capital
Stock" and "Shares Eligible for Future Sale," which accurately and fairly
summarize in all material respects the provisions of the laws and documents
referred to therein and those made under the caption "Underwriting," which
accurately and fairly summarizes in all material respects the provisions of
this Agreement referred to therein.
(g) The Representative shall have received an opinion, dated such
Closing Date, of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇, P.C., California counsel for
the Company, to the effect that:
(i) Each of the Company's California subsidiaries is a corporation
duly organized, validly existing and in good standing under the laws of the
State of California, and each such subsidiary is qualified as a foreign
corporation in each jurisdiction listed in an attached schedule.
(ii) The issuance and sale by the Company of the Offered Securities
delivered on such Closing Date, the performance by the Company of its
obligations under the Under writing Agreement, the use of the proceeds therefrom
as described in the Prospectus and the performance by the Selling Stockholders
of their obligations under the Custody Agreement will not violate any applicable
California law or regulation or, to such counsel's knowledge, any order, writ,
injunction or decree of any jurisdiction, court or governmental instrumentality
binding upon the Company or any of its properties, except that such counsel
expresses no opinion as to state securities or blue sky laws or as to compliance
with the antifraud provisions of federal and state securities laws.
(iii) No authorizations or consents of any governmental entity are
required under any applicable California law or regulation to permit the Company
or any Selling Stockholder to perform its obligations under the Underwriting
Agreement or the Custody Agreement in connection with the sale of the Offered
Securities, except such as may be required under state securities or blue sky
laws, as to which such counsel expresses no opinion, and except for such as have
been obtained under the Act.
22
(iv) The Company owns, directly or indirectly, all of the issued and
outstand ing capital stock of DDi Intermediate Holdings Corp., DDi Capital Corp.
and Dynamic Details, Incorporated based on a review of the stock transfer
records of each such corporation.
(h) The Representative shall have received an opinion, dated such
Closing Date, of Wragge & Co., English counsel for the Company, to the effect
that:
(i) The Company's United Kingdom ("U.K.") subsidiary, DDi Europe,
formerly known as MCM, is a corporation duly organized, validly existing and in
good standing under the laws of the U.K., and is qualified as a foreign
corporation in each jurisdic tion listed on an attached schedule.
(ii) The issuance and sale by the Company of the Offered Securities
delivered on such Closing Date, the performance by the Company of its
obligations under the Under writing Agreement, the use of the proceeds therefrom
as described in the Prospectus and the performance by the Selling Stockholders
of their obligations under the Custody Agreement will not violate any applicable
U.K. law or regulation or, to such counsel's knowledge, any order, writ,
injunction or decree of any jurisdiction, court or governmental instrumentality
binding upon the Company or any of its properties.
(iii) No authorizations or consents of any governmental entity are
required under any applicable U.K. law or regulation to permit the Company or
any Selling Stock holder to perform its obligations under the Underwriting
Agreement or the Custody Agree ment in connection with the sale of the Offered
Securities.
(iv) The Company owns, directly or indirectly, all of the issued and
outstand ing capital stock of DDi Europe based on a review of the stock transfer
records of such corporation.
(i) The Representative shall have received the opinion contemplated in
the Power of Attorney executed and delivered by each Selling Stockholder and an
opinion, dated such Closing Date, of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇, P.C.,
counsel for each of the Selling Stockholders, to the effect that:
(i) Each Selling Stockholder, other than the ▇▇▇▇ Entities and RGIP,
who are represented by Ropes & ▇▇▇▇ with respect to this opinion, had full
right, power and authority to sell, assign, transfer and deliver the Offered
Securities delivered by such Selling Stock holder on such Closing Date
hereunder.
(ii) No consent, approval, authorization or order of, or filing with,
any govern mental agency or body or any court is required to be obtained or made
by any Selling Stock holder for the consummation of the transactions
contemplated by the Custody Agreement or this
23
Agreement in connection with the sale of the Offered Securities sold by the
Selling Stockholders, except such as have been obtained and made under the Act
and such as may be required under state securities laws;
(iii) The execution, delivery and performance of the Custody Agreement
and this Agreement and the consummation of the transactions therein and herein
contemplated will not result in a breach or violation of (i) any of the terms
and provisions of, or constitute a default under, any statute, rule or
regulation of a type which is typically applicable to transactions similar to
the transactions contemplated by the Custody Agreement and this Agreement, or
(ii) to the best of such counsel's knowledge, any order of any governmental
agency or body or any court having jurisdiction over any Selling Stockholder or
any of its properties or any agreement or instrument to which any Selling
Stockholder is a party or by which any Selling Stockholder is bound or to which
any of the properties of any Selling Stockholder is subject, or (iii) the
charter or by-laws of any Selling Stockholder which is a corporation;
(iv) The Power of Attorney and related Custody Agreement with respect
to each Selling Stockholder has been duly authorized, executed and delivered by
such Selling Stock holder and constitute valid and legally binding obligations
of each such Selling Stockholder enforceable in accordance with their terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles; and
(v) This Agreement has been duly authorized, executed and delivered by
each Selling Stockholder.
(j) The Representative shall have received from Skadden, Arps, Slate,
▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the Underwriters, such opinion or opinions,
dated such Closing Date, with respect to the incorporation of the Company, the
validity of the Offered Securities delivered on such Closing Date, the
Registration Statements, the Prospectus and other related matters as the
Representative may require, and the Selling Stockholders and the Company shall
have furnished to such counsel such documents as they request for the purpose of
enabling them to pass upon such matters.
(k) The Representative shall have received a certificate, dated such
Closing Date, of the President or the Chairman and a principal financial or
accounting officer of the Company in which such officers, to the best of their
knowledge after reasonable investigation, shall state that: the representations
and warranties of the Company in this Agreement are true and correct; the
Company has complied with all agreements and satisfied all conditions on its
part to be per formed or satisfied hereunder at or prior to such Closing Date;
no stop order suspending the effectiveness of any Registration Statement has
been issued and no proceedings for that purpose have been instituted or are
contemplated by the Commission; the Additional Registration Statement (if any)
satisfying the requirements of subparagraphs (1) and (3) of Rule 462(b) was
filed pursuant to Rule 462(b), including payment of the applicable filing fee in
accordance with
24
Rule 111(a) or (b) under the Act, prior to the time the Prospectus was printed
and distributed to any Underwriter; and, subsequent to the date of the most
recent financial statements in the Prospectus, there has been no material
adverse change, nor any development or event involving a prospective material
adverse change, in the condition (financial or other), business, properties or
results of operations of the Company and its subsidiaries, taken as a whole
except as set forth in or contemplated by the Prospectus or as described in such
certificate.
(l) The Representative shall have received a letter, dated such Closing
Date, from each of PricewaterhouseCoopers LLP, KPMG LLP and KPMG Audit Plc which
meets the require ments of subsections (a), (b) and (c) of this Section,
respectively, except that the specified date referred to in such subsections
will be a date not more than three days prior to such Closing Date for the
purposes of this subsection.
(m) On or prior to the date of this Agreement, the Representative shall
have received lock-up letters from each of the executive officers and directors
of the Company and the Company's stockholders named in Schedule C hereto.
(n) Prior to the Closing Date (i) the Company shall have entered into an
amendment to its current Credit Agreement, as Amended and Restated as of August
28, 1998 and as amended as of March 22, 2000, relating to the use of proceeds
from the offering of the Securities, (ii) all conditions to the effectiveness of
such amendment, other than the receipt of proceeds from the offering of the
Securities, shall have been satisfied and (iii) such amended credit agreement
remains in full force and effect.
7. Indemnification and Contribution. (a) The Company and each of ▇▇▇▇▇▇
and ▇▇▇▇▇, jointly and severally, will indemnify and hold harmless each
Underwriter, its partners, directors and officers and each person, if any, who
controls such Underwriter within the meaning of Section 15 of the Act, against
any losses, claims, damages or liabilities, joint or several, to which such
Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in any Registration Statement, the Prospectus, or any
amendment or supplement thereto, or any related preliminary prospectus, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Underwriter for any legal or
other expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such loss, claim, damage, liability or action as
such expenses are incurred; provided, however, that the Company and each of
▇▇▇▇▇▇ and ▇▇▇▇▇ will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement in or omission or alleged omission from
any of such documents in reliance upon and in conformity with written
information furnished to the Company or ▇▇▇▇▇▇ or ▇▇▇▇▇ by any Underwriter
through the Representative specifically for use therein, it being understood and
agreed that the only such information furnished by any
25
Underwriter consists of the information described as such in subsection (c)
below; provided, further, that with respect to any untrue statement or alleged
untrue statement in or omission or alleged omission from any preliminary
prospectus the indemnity agreement contained in this subsection (a) shall not
inure to the benefit of any Underwriter from whom the person asserting any such
losses, claims, damages or liabilities purchased the Offered Securities
concerned, to the extent that a prospectus relating to such Offered Securities
was required to be delivered by such Underwriter under the Act in connection
with such purchase and any such loss, claim, damage or liability of such
Underwriter results from the fact that there was not sent or given to such
person, at or prior to the written confirmation of the sale of such Offered
Securities to such person, a copy of the Prospectus, if the Company had
previously furnished copies thereof to such Underwriter; and provided, further,
that the liability under this subsection of each of ▇▇▇▇▇▇ and ▇▇▇▇▇ shall be
limited to an amount equal to the aggregate proceeds net of underwrit ing
discounts and commissions (before deducting expenses) to each of ▇▇▇▇▇▇ and
▇▇▇▇▇ from the sale of the Securities sold by each of ▇▇▇▇▇▇ and ▇▇▇▇▇
hereunder.
Insofar as the foregoing indemnity agreement, or the representations and
warranties contained in Section 2(ii), may permit indemnification for
liabilities under the Act of any person who is an Underwriter or a partner or
controlling person of an Underwriter within the meaning of Section 15 of the Act
and who, at the date of this Agreement, is a director, officer or controlling
person of the Company, the Company has been advised that in the opinion of the
Commission such provisions may contravene Federal public policy as expressed in
the Act and may therefore be unenforceable. In the event that a claim for
indemnification under such agreement or such representations and warranties for
any such liabilities (except insofar as such agreement provides for the payment
by the Company of expenses incurred or paid by a director, officer or
controlling person in the successful defense of any action, suit or proceeding)
is asserted by such a person, the Company will submit to a court of appropriate
jurisdiction (unless in the opinion of counsel for the Company the matter has
already been settled by controlling precedent) the question of whether or not
indemnification by it for such liabilities is against public policy as expressed
in the Act and therefore unenforceable, and the Company will be governed by the
final adjudication of such issue.
(b) Each Selling Stockholder, other than those subject to subsection (a)
above, severally and not jointly, will indemnify and hold harmless each
Underwriter, its partners, directors and officers and each person who controls
such Underwriter within the meaning of Section 15 of the Act, against any
losses, claims, damages or liabilities (including, without limitation, any legal
or other expenses reasonably incurred in connection with defending or
investigating any such loss, claim, damage, liability or action as such expenses
are incurred) to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement or any material fact contained in any Registration Statement,
the Prospectus, or any amendment or supplement thereto, or any related
preliminary prospectus, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not
26
misleading, but only with reference, in each case, to information relating to
such Selling Stockholder furnished in writing by or on behalf of such Selling
Stockholder expressly for use in the Registration Statement, the Prospectus, or
any amendment or supplement thereto, or any related preliminary prospectus;
provided, however, that the liability under this subsection of each Selling
Stockholder shall be limited to an amount equal to the aggregate proceeds net of
underwriting discounts and commis sions (before deducting expenses) to such
Selling Stockholder from the sale of the Securities sold by such Selling
Stockholder hereunder.
(c) Each Underwriter will severally and not jointly indemnify and hold
harmless the Company, its directors and officers and each person, if any, who
controls the Company within the meaning of Section 15 of the Act, and each
Selling Stockholder against any losses, claims, damages or liabilities to which
the Company or such Selling Stockholder may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any Registration Statement,
the Prospectus, or any amendment or supplement thereto, or any related
preliminary prospectus, or arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such Underwriter
through the Representative specifically for use therein, and will reimburse any
legal or other expenses reasonably incurred by the Company and each Selling
Stockholder in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred, it being understood
and agreed that the only such information furnished by any Underwriter consists
of (i) the concession and reallowance figures appearing in the fourth paragraph
under the caption "Underwriting" in the Prospectus, (ii) the statements of Chase
Securities Inc. and FleetBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc. relating to their
participation in the Offering in the fourth to last paragraph under the caption
"Underwriting" in the Prospectus, and (iii) the information contained in the
last four paragraphs under the caption "Underwriting" in the Prospectus.
(d) 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
subsection (a), (b) or (c) above, notify the indemnify ing party of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under subsection (a), (b) or (c) above. In case any such action
is brought against any indemnified party and it notifies an indemnifying party
of the commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying
27
party will not be 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 other than reasonable costs of
investigation. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened action
in respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party unless such
(i) settlement includes an uncondi tional release of such indemnified party from
all liability on any claims that are the subject matter of such action and (ii)
does not include a statement as to, or an admission of, fault, culpability or a
failure to act by or on behalf of an indemnified party.
(e) If the indemnification provided for in this Section is unavailable or
insufficient to hold harmless an indemnified party under subsection (a), (b) or
(c) above, then each indemnify ing party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a), (b) or (c) above (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Selling Stockholders on the one hand and the Underwriters on the
other from the offering of the Securities or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company and the Selling Stockholders on
the one hand and the Underwriters on the other in connection with the statements
or omissions which resulted in such losses, claims, damages or liabilities as
well as any other relevant equitable consider ations. The relative benefits
received by the Company and the Selling Stockholders on the one hand and the
Underwriters on the other shall be deemed to be in the same proportion as the
total net proceeds from the offering (before deducting expenses) received by the
Company and the Selling Stockholders bear to the total underwriting discounts
and commissions received by the Underwriters. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company, the Selling
Stockholders or the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission. The amount paid by an indemnified party as a result of
the losses, claims, damages or liabilities referred to in the first sentence of
this subsection (f) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any action or claim which is the subject of this subsection (f).
Notwithstanding the provisions of this subsection (f), no Under writer shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this subsection
(f) to contribute are several in proportion to their respective underwriting
obligations and not joint.
28
(f) The obligations of the Company and the Selling Stockholders under
this Section shall be in addition to any liability which the Company and the
Selling Stockholders may otherwise have and shall extend, upon the same terms
and conditions, to each person, if any, who controls any Underwriter within the
meaning of the Act; and the obligations of the Underwriters under this Section
shall be in addition to any liability which the respective Underwriters may
otherwise have and shall extend, upon the same terms and conditions, to each
director of the Company, to each officer of the Company who has signed a
Registration Statement and to each person, if any, who controls the Company
within the meaning of the Act.
8. Default of Underwriters. If any Underwriter or Underwriters default in
their obligations to purchase Offered Securities hereunder on either the First
or any Optional Closing Date and the aggregate number of shares of Offered
Securities that such defaulting Underwriter or Underwrit ers agreed but failed
to purchase does not exceed 10% of the total number of shares of Offered
Securities that the Underwriters are obligated to purchase on such Closing Date,
CSFBC may make arrangements satisfactory to the Company and the Selling
Stockholders for the purchase of such Offered Securities by other persons,
including any of the Underwriters, but if no such arrangements are made by such
Closing Date, the non-defaulting Underwriters shall be obligated severally, in
proportion to their respective commitments hereunder, to purchase the Offered
Securities that such defaulting Underwriters agreed but failed to purchase on
such Closing Date. If any Underwriter or Underwriters so default and the
aggregate number of shares of Offered Securities with respect to which such
default or defaults occur exceeds 10% of the total number of shares of Offered
Securities that the Underwriters are obligated to purchase on such Closing Date
and arrangements satisfactory to CSFBC, the Company and the Selling Stockholders
for the purchase of such Offered Securities by other persons are not made within
36 hours after such default, this Agreement will terminate without liability on
the part of any non-defaulting Underwriter, the Company or the Selling
Stockholders, except as provided in Section 10 (provided that if such default
occurs with respect to Optional Securities after the First Closing Date, this
Agreement will not terminate as to the Firm Securities or any Optional
Securities purchased prior to such termination). As used in this Agreement, the
term "Underwriter" includes any person substituted for an Underwriter under this
Section. Nothing herein will relieve a defaulting Underwriter from liability for
its default.
9. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Selling Stockholders, of the Company or its officers and of the several
Underwriters set forth in or made pursuant to this Agreement will remain in full
force and effect, regardless of any investigation, or statement as to the
results thereof, made by or on behalf of any Underwriter, any Selling
Stockholder, the Company or any of their respective representatives, officers or
directors or any controlling person, and will survive delivery of and payment
for the Offered Securities. If this Agreement is terminated pursuant to Section
8 or if for any reason the purchase of the Offered Securities by the
Underwriters is not consummated, the Company and the Selling Stockholders shall
remain responsible for the expenses to be paid or reimbursed by them pursuant to
Section 5 and the
29
respective obligations of the Company, the Selling Stockholders and the
Underwriters pursuant to Section 7 and the obligations of the Company pursuant
to Section 7 shall remain in effect, and if any Offered Securities have been
purchased hereunder the representations and warranties in Section 2 and all
obligations under Section 5 shall also remain in effect. If the purchase of the
Offered Securities by the Underwriters is not consummated for any reason other
than solely because of the termination of this Agreement pursuant to Section 8
or other than solely because of the occurrence of any event specified in clause
(iii), (iv) or (v) of Section 6(e), the Company will reimburse the Underwriters
for all out-of-pocket expenses (including fees and disbursements of counsel)
reasonably incurred by them in connection with the offering of the Offered
Securities.
10. Notices. All communications hereunder will be in writing and, if sent
to the Underwrit ers, will be mailed, delivered or telegraphed and confirmed to
the Representative at Eleven Madison Avenue, New York, N.Y. 10010-3629,
Attention: Investment Banking Department - Transactions Advisory Group, or, if
sent to the Company, will be mailed, delivered or tele graphed and confirmed to
it at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Chief Executive
Officer, with a copy to Ropes & ▇▇▇▇ at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ setts 02110-2624, Attention: ▇▇▇▇▇▇ ▇▇▇▇, or, if sent to the Bain
Entities or any of them, will be mailed, delivered or telegraphed and confirmed
to such entities or entity at ▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ [ ], Attention: [
], with a copy to Ropes & ▇▇▇▇ at the above address, or, if sent to the Selling
Stockholders or any of them, will be mailed, delivered or telegraphed and
confirmed to ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇, P.C. at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇.,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇.▇. ▇▇▇▇▇▇; provided,
however, that any notice to an Underwriter pursuant to Section 7 will be mailed,
delivered or telegraphed and confirmed to such Underwriter.
11. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective personal representatives
and successors and the officers and directors and controlling persons referred
to in Section 7, and no other person will have any right or obligation
hereunder.
12. Representation. The Representative will act for the several
Underwriters in connection with the transactions contemplated by this Agreement,
and any action under this Agreement taken by the Representative will be binding
upon all the Underwriters. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ or ▇▇▇▇▇▇ ▇.
▇▇▇▇▇ will act for the Selling Stockholders in connection with such
transactions, and any action under or in respect of this Agreement taken by
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ or ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ will be binding upon all
the Selling Stockholders.
13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
30
14. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAWS.
The Company hereby submits to the non-exclusive jurisdiction of the Federal
and state courts in the Borough of Manhattan in The City of New York in any suit
or proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby.
31
If the foregoing is in accordance with the Representative's understanding of
our agreement, kindly sign and return to the Company one of the counterparts
hereof, whereupon it will become a binding agreement among the Selling
Stockholders, the Company and the several Underwriters in accordance with its
terms.
Very truly yours,
Selling Stockholders
By:
----------------------------
Attorney-in-fact
DDi Corp.
By:
----------------------------
Name:
Title:
The foregoing Underwriting Agreement is hereby
confirmed and accepted as of the date first above
written.
Credit Suisse First Boston Corporation
By:
----------------------------------
Name:
Title:
Acting on behalf of itself and as the
Representative of the several Underwriters.
32
SCHEDULE A
Number of Number of
Firm Securities Optional Securities
Selling Stockholder to be Sold to be Sold
------------------------------------ --------------- -------------------
▇▇▇▇ Capital Funds..................
▇▇▇▇ Capital Fund V, ▇.▇.
▇▇▇▇ Capital Fund V-B, L.P.
BCIP Associates, L.P.
BCIP Trust Associates, L.P.
Celerity Partners L.L.C.............
Celerity Details, L.L.C.
Celerity Liquids, L.L.C.
Celerity Dynamo, L.L.C.
Chase Manhattan Entities............
DI Investors, L.L.C.
Chase Manhattan Captial, ▇.▇.
▇▇▇▇▇ Securities Inc.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇...................
▇▇▇▇▇▇ ▇. ▇▇▇▇▇.....................
▇▇▇▇ ▇▇▇▇▇▇.........................
▇▇▇▇ ▇▇▇▇▇▇▇▇▇......................
▇▇▇▇▇ ▇▇▇▇▇.........................
▇▇▇▇▇ ▇▇▇▇▇.........................
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇.....................
▇▇▇▇▇ ▇▇▇▇▇▇........................
Bridgepoint Capital Nominees Ltd....
▇▇▇▇ ▇▇▇▇▇▇▇........................
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇...................
▇▇▇▇ ▇▇▇▇▇▇▇▇.......................
▇▇▇▇▇ ▇▇▇▇▇▇▇▇......................
▇▇▇▇▇▇▇▇▇ ESOP Capital Partners.....
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇..................
▇▇▇▇ ▇▇▇▇▇▇▇........................
▇▇▇ ▇▇▇▇............................
▇▇▇▇▇ ▇▇▇▇▇▇........................
▇▇▇▇▇▇ ▇▇▇▇▇▇.......................
33
Number of Number of
Firm Securities Optional Securities
Selling Stockholder to be Sold to be Sold
------------------------------------ --------------- -------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇......................
▇▇▇▇ ▇▇▇▇▇▇.........................
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇....................
Bryonie Glanfield...................
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇....................
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇....................
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇....................
▇▇▇▇▇▇ ▇▇▇▇▇▇.......................
Indosuez DCI Partners...............
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇.....................
▇▇▇ ▇▇▇▇▇▇▇▇........................
KB Mezzanine Fund II................
▇▇▇▇▇ ▇▇▇...........................
▇▇▇▇▇▇ ▇▇▇▇▇▇▇......................
▇▇▇▇▇▇ ▇▇▇▇▇▇.......................
▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇..................
▇▇▇▇ ▇▇▇▇▇▇.........................
▇▇▇▇▇ ▇▇▇▇▇▇▇▇......................
▇▇▇▇ ▇▇▇▇▇▇▇........................
▇▇▇▇▇ ▇▇▇▇▇▇........................
PMI Mezzanine Fund L.P..............
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇...............
RGIP, L.L.C.........................
▇▇▇▇ ▇▇▇▇▇▇.........................
▇▇▇▇▇▇▇ ▇▇▇▇........................
▇▇▇▇▇▇ ▇▇▇▇.........................
▇▇▇▇▇ ▇▇▇▇▇▇▇▇......................
▇▇▇▇ ▇▇▇▇▇▇▇▇.......................
▇▇▇▇ ▇▇▇▇▇..........................
▇▇▇▇▇ ▇▇▇▇▇▇........................
--------------------------------------
Total...................... 900,000
======================================
34
SCHEDULE B
Number of
Firm Securities
Underwriter to be Purchased
----------- ---------------
Credit Suisse First Boston Corporation..
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc..................
Chase Securities Inc....................
▇▇▇▇▇▇ Brothers Inc.....................
▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC..............
Total............................ 6,000,000
=================
35
SCHEDULE C
STOCKHOLDERS SUBJECT TO LOCK-UP AGREEMENTS
------------------------------------------
STOCKHOLDER PERCENTAGE OF SHARES OWNED BEFORE OFFERING
----------- ------------------------------------------
▇▇▇▇ Capital Funds 26.16%
▇▇▇▇ Capital Fund V, ▇.▇.
▇▇▇▇ Capital Fund V-B, L.P.
BCIP Associates, L.P.
BCIP Trust Associates, L.P.
Celerity Partners, L.L.C. 5.18%
Celerity Details, L.L.C.
Celerity Liquids, L.L.C.
Celerity Dynamo, L.L.C.
Chase Manhattan Entities 8.46%
DI Investors, L.L.C.
Chase Manhattan Capital, ▇.▇.
▇▇▇▇▇ Securities, Inc.
PMI Mezzanine Fund, LP 1.18%
The KB Mezzanine Fund II, L.P. 3.80%
Indosuez DCI Partners 1.20%
▇▇▇▇▇▇▇▇▇ ESOP Capital Partners 2.60%
RGIP, LLC *
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 3.27%
▇▇▇ ▇▇▇▇ 2.33%
▇▇▇ ▇▇▇▇▇ *
▇▇▇▇▇ ▇▇▇▇▇▇ *
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ *
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 3.83%
▇▇▇▇ ▇▇▇▇▇▇ 1.41%
36
STOCKHOLDER PERCENTAGE OF SHARES OWNED BEFORE OFFERING
----------- ------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ *
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ *
▇▇▇▇ ▇▇▇▇▇▇▇▇ *
Bonaficio ▇▇▇▇▇▇▇, Jr. *
▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ *
▇▇▇▇▇▇ ▇▇▇▇▇▇ *
Bridgepoint Capital Nominees Ltd. 3.82%
▇▇▇▇▇▇ ▇▇▇▇ *
▇▇▇▇▇▇▇ ▇▇▇▇ *
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ *
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ *
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ *
Bryonie Glanfield *
▇▇▇▇ ▇▇▇▇▇▇▇ *
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ *
▇▇▇▇▇▇ ▇▇▇▇▇▇ *
▇▇▇▇ ▇▇▇▇▇▇▇ *
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ *
▇▇▇ ▇▇▇▇▇▇▇▇ *
▇▇▇▇ ▇▇▇▇▇▇▇▇ *
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ *
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ *
▇▇▇▇ ▇▇▇▇▇▇ *
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ *
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ *
▇▇▇▇▇ ▇▇▇▇▇▇ *
37
STOCKHOLDER PERCENTAGE OF SHARES OWNED BEFORE OFFERING
----------- ------------------------------------------
▇▇▇▇ ▇▇▇▇▇ *
▇▇▇▇▇▇ ▇▇▇▇▇▇ *
▇▇▇ ▇▇▇▇ *
▇▇▇▇ ▇▇▇▇▇▇▇ *
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ *
▇.▇. ▇▇▇▇▇ *
▇▇▇▇▇ ▇▇▇▇▇ *
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ *
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ *
▇▇▇▇▇▇ ▇▇▇▇▇▇ *
▇▇▇▇ ▇▇▇▇▇▇ *
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ *
38