EXECUTION COPY
Exhibit 1.2
$100,000,000
DDI CORP.
[ ]% CONVERTIBLE SUBORDINATED NOTES DUE [ ], 2008
UNDERWRITING AGREEMENT
----------------------
February __, 2001
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 ("COMPANY"), proposes
to issue and sell $100,000,000 principal amount ("FIRM SECURITIES") of its ___%
Convertible Subordinated Notes Due ____, 2008 ("SECURITIES") as set forth below,
all to be issued under an indenture, dated as of February 20, 2001
("INDENTURE"), between the Company and The State Street Bank and Trust Company,
a Massachusetts trust company, as Trustee. The Firm Securities are herein
collectively called the "OFFERED SECURITIES." The Company hereby agrees with the
several Underwriters named in Schedule A hereto ("UNDERWRITERS") as follows:
2. Representations and Warranties of the Company. The Company represents
and warrants to, and agrees with, the several Underwriters that:
(i) A registration statement (No. 333-54730) relating to the
Offered Securities and the shares of the Company's common stock, par value $.01
per share ("UNDERLYING SHARES") into which the Securities are convertible,
including a form of prospectus, has been filed with the Securities and Exchange
Commission ("COMMISSION") and either (i) has been declared effective under the
Securities Act of 1933 ("ACT") and is not proposed to be amended or (ii) is
proposed to be amended by amendment or post-effective amendment. If such
registration statement ("INITIAL REGISTRATION STATEMENT") has been declared
effective, either (i) an additional registration statement ("ADDITIONAL
REGISTRATION STATEMENT") relating to the Offered Securities and the
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Underlying Shares into which the Securities are convertible 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 and such Underlying Shares all have been duly registered
under the Act pursuant to the initial registration statement and, if applicable,
the additional registration statement or (ii) 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 and such Underlying Shares 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 registra
tion 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 (i) 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 (ii) 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 registra tion 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 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 herein referred to collectively as the "REGISTRATION STATEMENTS"
and individually as a "REGISTRATION STATEMENT."
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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: (i) on the Effective Date
of the Initial Registration Statement, the Initial Registration Statement
conformed in all respects to the requirements of the Act, the Trust Indenture
Act of 1939 ("TRUST INDENTURE 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, (ii) 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, the Trust Indenture 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
(iii) 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, the Trust Indenture 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, the Trust Indenture
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 Additional 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
specifically for use therein, it being understood and agreed that the only such
information is that described as such in Section 7(b) hereof.
(ii) 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 Company is duly qualified to do
business as a foreign corporation in good standing in all other
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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 September 30, 2000, the Company had an authorized
capitalization as set forth in the Prospectus under the heading "Capitalization"
in the column entitled "Actual;" assuming the completion of the sale of the
securities offered in our October 2000 common stock offering and the application
of the net proceeds therefrom, as described in the Prospectus (the "OCTOBER 2000
OFFERING"), had occurred as of September 30, 2000, the Company had the
capitalization as set forth in the Prospectus under the heading "Capitalization"
in the column entitled "October 2000 Offering Pro Forma;" 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 of the October 2000 Offering as of September 30, 2000,
the Company will have the capitalization as set forth in the column entitled
"Pro Forma;" 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 of the Company's
concurrent offering of common stock and the application of the estimated net
proceeds therefrom, as contemplated in the Prospectus, and assuming the
completion of the October 2000 Offering as of September 30, 2000, will have the
capitalization as set forth in the column entitled "Pro Forma As Adjusted."
(vi) The Indenture has been duly authorized and, if the Effective
Time of a Registration Statement is prior to the execution and delivery of this
Agreement, has been or otherwise upon such Effective Time will be duly qualified
under the Trust Indenture Act with respect to the Offered Securities registered
thereby; when the Offered Securities are delivered and paid for pursuant to this
Agreement on each Closing Date (as defined below), the Indenture will have been
duly executed and delivered and will constitute a valid and legally binding
instrument enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudu lent transfer, reorganization, moratorium and similar laws of
general applicability relating to or
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affecting creditors' rights or the enforcement of the security provided by the
Indenture and to general equity principles.
(vi) When the Offered Securities are delivered and paid for
pursuant to this Agreement on each Closing Date, such Offered Securities will be
convertible into the Underlying Shares of the Company in accordance with the
terms of the Indenture; the Underlying Shares initially issuable upon conversion
of such Offered Securities have been duly authorized and reserved for issuance
upon such conversion and, when issued upon such conversion, will be validly
issued, fully paid and nonassessable; all outstanding shares of capital stock of
the Company have been duly authorized and validly issued, are fully paid and
nonassessable and conform to the description thereof contained in the
Prospectus; and the stockholders of the Company have no preemptive rights with
respect to the Offered Securities or the Underlying Shares.
(vi) 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 against the Company or any Underwriter for a brokerage
commission, finder's fee or other like payment in connection with this offering.
(ix) 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.
(x) The Underlying Shares, upon issuance, will be listed for
trading on The Nasdaq Stock Market's National Market.
(xi) 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.
(xii) The execution, delivery and performance of the Indenture and
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
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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.
(xi) This Agreement has been duly authorized, executed and
delivered by the Company.
(xiv) 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 thereof by them; the Company and its
subsidiaries have good and market able title to all real properties and personal
property acquired by them in the acquisition of substantially all of the assets
of Golden Manufacturing, Inc. ("GOLDEN") for a purchase price of approximately
$14.4 million in cash and assumption of debt, net of cash on September 15, 2000
(the "GOLDEN ACQUISITION"), 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 ACQUISI
TION"); 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 Golden Acquisition, 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.
(xv) 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
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adversely to the Company or any of its subsidiaries, would individually or in
the aggregate have a Material Adverse Effect.
(xvi) 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.
(xvii) 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.
(xviii) Except as disclosed in the Prospectus, neither the Company nor
any of its subsidiaries is in violation of any statute, any rule, regulation,
decision or order of any governmental agency or body or any court, domestic or
foreign, relating to the use, disposal or release of hazardous or toxic
substances or relating to the protection or restoration of the environment or
human exposure to hazardous or toxic substances (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 environ mental laws, or is subject to any claim
relating to any environmental laws, which violation, contamination, 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.
(xix) 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.
(xx) 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
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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.
(xxi) 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.
(xxii) The Company is not and, after giving effect to the offering
and sale of the Offered Securities and the application of the proceeds therefrom
as described in the Prospectus, will not be an "investment company" as defined
in the Investment Company Act of 1940.
(xxiii) 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.
(xxiv) 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 Securities or the Underlying
Shares to facilitate the sale or resale of the Offered Securities.
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(xxv) 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.
(xxvi) No relationship, direct or indirect, exists between or among
the Com pany 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.
(xxvii) 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 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.
(xxviii) 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.
(xxix) 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 businesses, 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
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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.
(xxx) 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.
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 agrees to sell to each
Underwriter, and each Underwriter agrees, severally and not jointly, to purchase
from the Company, at a purchase price of __% of the principal amount thereof
plus accrued interest from ______ to the First Closing Date (as defined herein),
that principal amount 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 $100,000,000 principal amount of Firm
Securities by a fraction the numerator of which is the number of Firm Securities
set forth opposite the name of such Underwriter in Schedule A hereto and the
denominator of which is the total principal amount of Firm Securities.
The Company will deliver against payment of the purchase price the
Firm Securities in the form of one or more permanent global securities in
definitive form (the "FIRM GLOBAL SECURITIES") deposited with the Trustee as
custodian for The Depository Trust Company ("DTC") and registered in the name of
Cede & Co., as nominee for DTC. Interests in any Firm Global Securities will be
held only in book-entry form through DTC, except in the limited circumstances
described in the Prospectus. Payment for the Firm Securities shall be made by
the Underwriters 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 at the office of Ropes & ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ at 9:30 A.M., (eastern standard time), on February 20, 2001, 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," against delivery to the Trustee as custodian for DTC of the Firm Global
Securities representing all of the Firm Securities. The Firm Global Securities
will be made available for checking at the office of Ropes & ▇▇▇▇ at least 24
hours prior to the First Closing Date.
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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. The Company agrees with the
several Underwriters that:
(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
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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 Prospec tus 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
effectiveness 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 proceedings 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 Commis sion, 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 (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
12
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 qualifica tions 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 Representative 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 shares of its
common stock, any securities convertible into or exchangeable or exercisable for
any shares of its common stock, or U.S. dollar denominated debt securities
issued or guaranteed by the Company and having a maturity of more than one year
from the date of issue, or publicly disclose the intention to make any such
offer, sale, pledge, disposition or filing, without the prior written consent of
CSFBC, except (i) grants of employee stock options pursuant to the terms of a
plan in effect on the date hereof, (ii) issuances of common stock pursuant to
the exercise of employee stock options or warrants outstanding on the date
hereof, (iii) issuances of common stock pursuant to the offering being made
concurrently herewith, (iv) issuances of Underlying Shares upon the conversion
of the Offered Securities, in accordance with the terms thereof and (v)
issuances of common stock (and agreements to provide such common stock) as full
or partial consideration in connection with any of the Company's future
acquisitions; provided that, CSFBC has received written notice of such proposed
issuances of common stock in advance thereof and, provided further, that those
who receive common stock pursuant to such issuances may not offer, sell,
contract to sell, pledge or otherwise dispose of, directly or indirectly, any of
the common stock referred to in this clause (v), or publicly disclose the
intention to make any such offer, sale, pledge or disposition, without the prior
written consent of CSFBC, for a period of 90 days after the date of the public
offering of the Offered Securities.
13
(i) The Company agrees with the several Underwriters that it will pay
all expenses incident to the performance of the obligations of the Company 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.
(j) The amendment to the Credit Agreement, as Amended and Restated as
of August 28, 1998 and as amended as of March 22, 2000 and October 6, 2000,
relating to the use of proceeds from the offering of the Offered Securities,
will become effective on or prior to the First Closing Date.
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 will be subject to the accuracy of the representations and
warranties on the part of the Company herein, to the accuracy of the statements
of Company officers made pursuant to the provisions hereof, to the perfor ▇▇▇▇▇
by the Company of its 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
14
Statement of Auditing Standards No. 71, Interim Financial Information, on the
unaudited financial statements included in the Registration Statements;
(ii) 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 nine-month
periods ended September 30, 1999 and September 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 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
(iv), 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
15
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
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 confirming that they are independent public
accountants within the meaning of the Act and the applicable 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
16
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.
(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
announcement 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, to the effect that:
17
(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 Indenture has been duly authorized, executed and delivered
and has been duly qualified under the Trust Indenture Act; the Offered
Securities delivered on such Closing Date have been duly authorized, executed,
authenticated, issued and delivered and conform to the description thereof
contained in the Prospectus; and under the laws of the State of New York, the
Indenture and the Offered Securities delivered on such Closing Date constitute
valid and legally binding obligations of the Company 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.
(iv) The Offered Securities delivered on such Closing Date are
convertible into the Underlying Shares of the Company in accordance with the
terms of the Indenture; the Underlying Shares initially issuable upon conversion
of such Offered Securities have been duly authorized and reserved for issuance
upon such conversion and, when issued upon such conversion, will be validly
issued, fully paid and nonassessable and will require no further registration
under the Act; the outstanding shares of capital stock of the Company have been
duly authorized and validly issued, are fully paid and nonassessable and conform
to the description thereof contained in the Prospectus; and the stockholders of
the Company have no preemptive rights with respect to the Securities or the
Underlying Shares.
(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 and the Company's compliance with the terms and
provisions thereof, the performance by the Company of its obligations under the
Underwriting Agreement and the Indenture, and the use of the proceeds from the
sale of the Offered Securities as described in the Prospectus will not cause the
Company to (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 Corporation
Law or, to such counsel's knowledge, any order, writ, injunction
18
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
to perform its obligations under the Underwrit ing 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.
(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
therefrom, 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 Initial Registration Statement became effective on
February 13, 2001. 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.
(xiv) The execution, delivery and performance of this Agreement and
the Indenture and the consummation of the transactions herein and therein
contemplated will not result in a breach or violation of any of the terms and
provisions of, or constitute a default under,
19
any statute, rule or regulation of a type which is typically applicable to
transactions similar to the transactions contemplated by this Agreement.
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
Com pany 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, the
Trust Indenture Act and the published rules and regulations of the
Commission thereun der, 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, 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," "Description of Notes,"
"Certain Federal Income Tax Considerations" 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:
20
(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 and the Company's compliance with the terms and
provisions thereof, the performance by the Company of its obligations under the
Underwriting Agreement and the Indenture, and the use of the proceeds from the
sale of the Offered Securities as described in the Prospectus 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
to perform its obliga tions under the Underwriting 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.
(iv) The Company owns, directly or indirectly, all of the issued
and outstanding 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 jurisdiction 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 Underwriting Agreement and the use of the proceeds
therefrom as described in the Prospectus 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.
21
(iii) No authorizations or consents of any governmental entity are
required under any applicable U.K. law or regulation to permit the Company to
perform its obligations under the Underwriting Agreement in connection with the
sale of the Offered Securities.
(iv) The Company owns, directly or indirectly, all of the issued
and outstanding capital stock of DDi Europe based on a review of the stock
transfer records of such corporation.
(i) 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 Company shall have furnished to such counsel
such documents as they request for the purpose of enabling them to pass upon
such matters.
(j) 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 performed 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 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.
(k) 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 requirements 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.
(l) Prior to the Closing Date (i) the Company shall have entered into
an amend ment to its current Credit Agreement, as Amended and Restated as of
August 28, 1998 and as amended as of March 22, 2000 and October 6, 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.
22
7. Indemnification and Contribution. (a) The Company 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 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 by any Underwriter through the
Representative specifically for use therein, it being understood and agreed that
the only such information furnished by any 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.
Insofar as the foregoing indemnity agreement, or the representations
and warran ties 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
23
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 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 against any
losses, claims, damages or liabilities to which the Company 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 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
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Inc. relating to their participation in the Offering in the
tenth paragraph under the caption "Underwriting" in the Prospectus, and (iii)
the information contained in the last three paragraphs under the caption
"Underwriting" in the Prospectus.
(c) Promptly after receipt by an indemnified party under this Section
or Section 9 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) or (b) above or Section 9, notify the indemnifying party of
the commencement thereof; but the omission to so notify the indemnifying party
will not relieve it from any liability which it may have to any indemnified
party otherwise than under subsection (a) or (b) above or Section 9. In case
any such action is brought against any indemnified party and it notifies an
indemnifying party of the commence ment 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 to so assume the defense thereof, the indemnifying party will
not be liable to such indemnified party under this Section or Section 9, as the
case may be, 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
24
by such indemnified party unless such (i) settlement includes an unconditional
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.
(d) If the indemnification provided for in this Section is
unavailable or insuffi cient to hold harmless an indemnified party under
subsection (a), (b) or (c) above, then each indemnifying 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 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 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
considerations. The relative benefits received by the Company 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 bear to the total underwriting discounts and commissions received
by the Underwrit ers. 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 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
Underwriter 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.
(e) The obligations of the Company under this Section or Section 9
shall be in addition to any liability which the Company may otherwise have and
shall extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter [or the QIU (as hereinafter defined)] 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
25
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 obliga tions to purchase Offered Securities hereunder on either the First
or any Optional Closing Date and the aggregate principal amount of Offered
Securities that such defaulting Underwriter or Underwriters agreed but failed to
purchase does not exceed 10% of the total principal amount of Offered Securities
that the Underwriters are obligated to purchase on such Closing Date, CSFBC may
make arrangements satisfactory to the Company 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 principal amount of Offered Securities
with respect to which such default or defaults occur exceeds 10% of the total
principal amount of Offered Securities that the Underwriters are obligated to
purchase on such Closing Date and arrangements satisfactory to CSFBC, the
Company 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, except as
provided in Section 10. 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. [Qualified Independent Underwriter. The Company hereby confirms that
at its request CSFBC has without compensation acted as "qualified independent
underwriter" (in such capacity, the "QIU") within the meaning of Rule 2720 of
the Conduct Rules of the National Association of Securities Dealers, Inc. in
connection with the offering of the Offered Securities. The Company will
indemnify and hold harmless the QIU against any losses, claims, damages or
liabilities, joint or several, to which the QIU 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 the QIU's acting (or
alleged failing to act) as such "qualified independent underwriter" and will
reimburse the QIU for any legal or other expenses reasonably incurred by the QIU
in connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred.]
10. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements 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, 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
26
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 shall remain responsible for the expenses to be paid or
reimbursed by them pursuant to Section 5 and the respective obligations of the
Company and the Underwriters pursuant to Section 7 and the obligations of the
Company pursuant to Section 9 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 occur rence of any
event specified in clause (iii), (iv) or (v) of Section 6(e), the Company will
▇▇▇▇ ▇▇▇▇▇ 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.
11. Notices. All communications hereunder will be in writing and, if sent
to the Underwriters, 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 telegraphed and confirmed to
it at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Chief Executive
Officer, with a copy to Ropes & ▇▇▇▇ 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.
12. 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.
13. 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.
14. 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.
15. 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.
27
If the foregoing is in accordance with the Representative's understanding
of our agree ment, kindly sign and return to the Company one of the counterparts
hereof, whereupon it will become a binding agreement among the Company and the
several Underwriters in accordance with its terms.
Very truly yours,
DDi Corp.
By:
____________________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President and Chief Executive Officer
The foregoing Underwriting Agreement is hereby
confirmed and accepted as of the date first above
written.
Credit Suisse First Boston Corporation
By: __________________________________
Name:
Title: Managing Director
Acting on behalf of itself and as the
Representative of the several Underwriters.
28
SCHEDULE A
PRINCIPAL AMOUNT
OF FIRM SECURITIES
UNDERWRITER TO BE PURCHASED
------------ -------------------
Credit Suisse First Boston Corporation.............
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Inc............................
-------------------
Total............................... $100,000,000
===================
29