Draft of August 21, 2000
UNDERWRITING AGREEMENT
August [__], ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.
Banc of America Securities LLC
▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, LLC
As Representatives of the several Underwriters
c/o FleetBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
INTRODUCTORY. Elantec Semiconductor, Inc., a Delaware
corporation (the "Company"), proposes to issue and sell to the several
underwriters named in SCHEDULE A (the "Underwriters") an aggregate of
1,520,000 shares of its Common Stock, par value $0.01 per share (the "Common
Shares"); and the stockholders of the Company named in SCHEDULE B
(collectively, the "Selling Stockholders") severally propose to sell to the
Underwriters an aggregate of 80,000 Common Shares. The 1,520,000 Common
Shares to be sold by the Company and the 80,000 Common Shares to be sold by
the Selling Stockholders are collectively called the "Firm Shares." In
addition, the Company has granted to the Underwriters an option to purchase
up to an additional 240,000 Common Shares (the "Option Shares") as provided
in Section 2. The Firm Shares and, if and to the extent such option is
exercised, the Option Shares are collectively called the "Shares."
FleetBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc. ("▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇"), Banc of America
Securities LLC, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC ("▇▇▇▇▇▇") and ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ &
▇▇▇▇, Inc. have agreed to act as Representatives of the several Underwriters
(in such capacity, the "Representatives") in connection with the offering and
sale of the Common Shares.
The Company has prepared and filed with the Securities and
Exchange Commission (the "Commission") a registration statement on Form S-3
(File No. 333-43864), which contains a form of prospectus, subject to
completion, to be used in connection with the public offering and sale of the
Shares. Each such prospectus, subject to completion, used in connection with
such public offering is called a "preliminary prospectus." Such registration
statement, as amended, including the financial statements, exhibits and
schedules thereto, in the form in which it was declared effective by the
Commission under the Securities Act of 1933, as amended, and the
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rules and regulations promulgated thereunder (collectively, the "Securities
Act"), including all documents incorporated or deemed to be incorporated by
reference therein and any information deemed to be a part thereof at the time
of effectiveness pursuant to Rule 430A or Rule 434 under the Securities Act
or the Securities Exchange Act of 1934 and the rules and regulations
promulgated thereunder (collectively, the "Exchange Act"), is called the
"Registration Statement." Any registration statement filed by the Company
pursuant to Rule 462(b) under the Securities Act is called the "Rule 462(b)
Registration Statement," and from and after the date and time of filing of
the Rule 462(b) Registration Statement the term "Registration Statement"
shall include the Rule 462(b) Registration Statement. Such prospectus, in the
form first used by the Underwriters to confirm sales of the Shares, including
all documents incorporated or deemed to be incorporated by reference therein
and any information deemed to be a part thereof at such time of effectiveness
pursuant to Rule 430A or Rule 434 under the Securities Act or the Exchange
Act is called the "Prospectus" which term shall be deemed to include the
"electronic Prospectus" provided by the Company for use in connection with
the offering of the Shares as contemplated by Section 3(A)(e) of this
Agreement. All references in this Agreement to the Registration Statement,
the Rule 462(b) Registration Statement, a preliminary prospectus, the
Prospectus, or any amendments or supplements to any of the foregoing, shall
include any copy thereof filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval System ("▇▇▇▇▇"). All references in
this Agreement to financial statements and schedules and other information
which is "contained," "included" or "stated" in the Registration Statement or
the Prospectus (and all other references of like import) shall be deemed to
mean and include all such financial statements and schedules and other
information which is or is deemed to be incorporated by reference in the
Registration Statement or the Prospectus, as the case may be; and all
references in this Agreement to amendments or supplements to the Registration
Statement or the Prospectus shall be deemed to mean and include the filing of
any document under the Exchange Act which is or is deemed to be incorporated
by reference in the Registration Statement or the Prospectus, as the case may
be.
The Company and each of the Selling Stockholders hereby confirm
their respective agreements with the Underwriters as follows:
SECTION 1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE
SELLING STOCKHOLDERS
A. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
hereby represents, warrants and covenants to each Underwriter as follows:
(a) COMPLIANCE WITH REGISTRATION REQUIREMENTS. The Registration
Statement and any Rule 462(b) Registration Statement have been declared
effective by the Commission under the Securities Act. The Company has
complied to the Commission's satisfaction with all requests of the Commission
for additional or supplemental information. No stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement is in effect and no proceedings for such purpose have been
instituted or are pending or, to the best knowledge of the Company, are
contemplated or threatened by the Commission.
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Each preliminary prospectus and the Prospectus when filed
complied in all material respects with the Securities Act and, if filed by
electronic transmission pursuant to ▇▇▇▇▇ (except as may be permitted by
Regulation S-T under the Securities Act), was identical to the copy thereof
delivered to the Underwriters for use in connection with the offer and sale
of the Shares. Each of the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendment thereto, at the time
it became effective and at all subsequent times, complied and will comply in
all material respects with the Securities Act and did not and will not
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading. Each preliminary prospectus, as of its date, and the
Prospectus, as amended or supplemented, as of its date and at all subsequent
times through the 30th day after the date hereof, did not and will not
contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The representations
and warranties set forth in the two immediately preceding sentences do not
apply to statements in or omissions from the Registration Statement, any
Rule 462(b) Registration Statement, or any post-effective amendment thereto,
or the Prospectus, or any amendments or supplements thereto, made in reliance
upon and in conformity with information relating to any Underwriter furnished
to the Company in writing by the Representatives expressly for use therein.
There are no contracts or other documents required to be described in the
Prospectus or to be filed as exhibits to the Registration Statement which
have not been described or filed as required.
(b) OFFERING MATERIALS FURNISHED TO UNDERWRITERS. The Company has
delivered to the Representatives four complete conformed copy of the
Registration Statement and of each consent and certificate of experts filed
as a part thereof, and conformed copies of the Registration Statement
(without exhibits) and preliminary prospectuses and the Prospectus, as
amended or supplemented, in such quantities and at such places as the
Representatives have reasonably requested for each of the Underwriters.
(c) DISTRIBUTION OF OFFERING MATERIAL BY THE COMPANY. The Company
has not distributed and will not distribute, prior to the later of the Second
Closing Date (as defined below) and the completion of the Underwriters'
distribution of the Shares, any offering material in connection with the
offering and sale of the Shares other than a preliminary prospectus, the
Prospectus or the Registration Statement.
(d) THE UNDERWRITING AGREEMENT. This Agreement has been duly
authorized, executed and delivered by, and is a valid and binding agreement
of, the Company, enforceable in accordance with its terms, except as rights
to indemnification hereunder may be limited by applicable law and except as
the enforcement hereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the
rights and remedies of creditors or by general equitable principles.
(e) AUTHORIZATION OF THE SHARES TO BE SOLD BY THE COMPANY. The
Shares to be purchased by the Underwriters from the Company have been duly
authorized for issuance and sale pursuant to this Agreement and, when issued
and delivered by the
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Company pursuant to this Agreement, will be validly issued, fully paid and
nonassessable.
(f) AUTHORIZATION OF THE SHARES TO BE SOLD BY THE SELLING
STOCKHOLDERS. The Common Shares to be purchased by the Underwriters from the
Selling Stockholders, when issued, were validly issued, fully paid and
nonassessable.
(g) NO APPLICABLE REGISTRATION OR OTHER SIMILAR RIGHTS. There are
no persons with registration or other similar rights to have any equity or
debt securities registered for sale under the Registration Statement or
included in the offering contemplated by this Agreement.
(h) NO MATERIAL ADVERSE CHANGE. Subsequent to the respective dates
as of which information is given in the Prospectus: (i) there has been no
material adverse change, or any development that could reasonably be expected
to result in a material adverse change, in the condition, financial or
otherwise, or in the earnings, business, operations or prospects, whether or
not arising from transactions in the ordinary course of business, of the
Company and its subsidiaries, considered as one entity (any such change or
effect, where the context so requires, is called a "Material Adverse Change"
or a "Material Adverse Effect"); (ii) the Company and its subsidiaries,
considered as one entity, have not incurred any material liability or
obligation, indirect, direct or contingent, not in the ordinary course of
business nor entered into any material transaction or agreement not in the
ordinary course of business; and (iii) there has been no dividend or
distribution of any kind declared, paid or made by the Company or, except for
dividends paid to the Company or other subsidiaries, any of its subsidiaries
on any class of capital stock or repurchase or redemption by the Company or
any of its subsidiaries of any class of capital stock.
(i) INDEPENDENT ACCOUNTANTS. Deloitte & Touche LLP and Ernst &
Young LLP, who have expressed their opinions with respect to the financial
statements (which term as used in this Agreement includes the related notes
thereto) and supporting schedules filed with the Commission as a part of the
Registration Statement and included in the Prospectus, are independent public
or certified public accountants as required by the Securities Act and the
Exchange Act.
(j) PREPARATION OF THE FINANCIAL STATEMENTS. The financial
statements filed with the Commission as a part of the Registration Statement
and included in the Prospectus present fairly the consolidated financial
position of the Company and its subsidiaries as of and at the dates indicated
and the results of their operations and cash flows for the periods specified.
The supporting schedules included in the Registration Statement present
fairly the information required to be stated therein. Such financial
statements and supporting schedules have been prepared in conformity with
generally accepted accounting principles as applied in the United States
applied on a consistent basis throughout the periods involved, except as may
be expressly stated in the related notes thereto. No other financial
statements or supporting schedules are required to be included in the
Registration Statement. The financial data set forth in the Prospectus under
the captions "Prospectus Summary - Summary Consolidated Financial Data,"
"Capitalization," and "Selected Consolidated Financial Data" fairly present
the information set forth therein on a basis consistent with that of the
audited financial
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statements contained in the Registration Statement. No pro forma financial
information is required to be included in the Registration Statement pursuant
to Regulation S-X.
(k) COMPANY'S ACCOUNTING SYSTEM. The Company and each of its
subsidiaries maintain a system of accounting controls sufficient to provide
reasonable assurances that (i) transactions are executed in accordance with
management's general or specific authorization; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles as applied in the
United States and to maintain accountability for assets; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared
with existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(l) SUBSIDIARIES OF THE COMPANY. The Company does not own or
control, directly or indirectly, any corporation, association or other entity
other than the subsidiaries listed in SCHEDULE C.
(m) INCORPORATION AND GOOD STANDING OF THE COMPANY AND ITS
SUBSIDIARIES. Each of the Company and its subsidiaries has been duly
organized and is validly existing as a corporation or limited liability
company, as the case may be, in good standing under the laws of the
jurisdiction in which it is organized with full corporate power and authority
to own its properties and conduct its business as described in the
prospectus, and is duly qualified to do business as a foreign corporation and
is in good standing under the laws of each jurisdiction which requires such
qualification.
(n) CAPITALIZATION OF THE SUBSIDIARIES. All the outstanding shares
of capital stock of each subsidiary have been duly and validly authorized and
issued and are fully paid and nonassessable, and, except as otherwise set
forth in the Prospectus, all outstanding shares of capital stock of the
subsidiaries are owned by the Company either directly or through wholly owned
subsidiaries free and clear of any security interests, claims, liens or
encumbrances.
(o) NO PROHIBITION ON SUBSIDIARIES FROM PAYING DIVIDENDS OR MAKING
OTHER DISTRIBUTIONS. No subsidiary of the Company is currently prohibited,
directly or indirectly, from paying any dividends to the Company, from making
any other distribution on such subsidiary's capital stock, from repaying to
the Company any loans or advances to such subsidiary from the Company or from
transferring any of such subsidiary's property or assets to the Company or
any other subsidiary of the Company, except as described in or contemplated
by the Prospectus.
(p) CAPITALIZATION AND OTHER CAPITAL STOCK MATTERS. The authorized,
issued and outstanding capital stock of the Company is as set forth in the
Prospectus under the caption "Capitalization" (other than for subsequent
issuances, if any, pursuant to employee benefit plans described in the
Prospectus or upon exercise of outstanding options or warrants described in
the Prospectus). The Common Shares (including the Shares) conform in all
material respects to the description thereof contained in the Prospectus. All
of the issued and outstanding Common Shares have been duly authorized and
validly issued, are fully paid and nonassessable and have been issued in
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compliance with federal and state securities laws. None of the outstanding
Common Shares were issued in violation of any preemptive rights, rights of
first refusal or other similar rights to subscribe for or purchase securities
of the Company. There are no authorized or outstanding options, warrants,
preemptive rights, rights of first refusal or other rights to purchase, or
equity or debt securities convertible into or exchangeable or exercisable
for, any capital stock of the Company or any of its subsidiaries other than
those accurately described in the Prospectus. The description of the
Company's stock option, stock bonus and other stock plans or arrangements,
and the options or other rights granted thereunder, set forth in the
Prospectus accurately and fairly describes such plans, arrangements, options
and rights.
(q) STOCK EXCHANGE LISTING. The Shares are registered pursuant to
Section 12(g) of the Exchange Act and are listed on the Nasdaq National
Market (the "Nasdaq"), and the Company has taken no action designed to, or
likely to have the effect of, terminating the registration of the Common
Shares under the Exchange Act or delisting the Common Shares from the Nasdaq
national, nor has the Company received any notification that the Commission
or the National Association of Securities Dealers, Inc. (together with its
regulatory subsidiary NASD Regulation, Inc., the "NASD") is contemplating
terminating such registration or listing.
(r) NO CONSENTS, APPROVALS OR AUTHORIZATIONS REQUIRED. No consent,
approval, authorization, filing with or order of any court or governmental
agency or regulatory body is required in connection with the transactions
contemplated herein, except such as have been obtained or made under the
Securities Act and such as may be required (i) under the blue sky laws of any
jurisdiction in connection with the purchase and distribution of the Shares
by the Underwriters in the manner contemplated here and in the Prospectus,
(ii) by the NASD, and (iii) by the federal and provincial laws of Canada.
(s) NON-CONTRAVENTION OF EXISTING INSTRUMENTS AGREEMENTS. Neither
the issue and sale of the Shares nor the consummation of any other of the
transactions herein contemplated nor the fulfillment of the terms hereof will
conflict with, result in a breach or violation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any of
its subsidiaries pursuant to, (i) the charter or by-laws of the Company or
any of its subsidiaries, (ii) the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other agreement,
obligation, condition, covenant or instrument to which the Company or any of
its subsidiaries is a party or bound or to which its or their property is
subject or (iii) any statute, law, rule, regulation, judgment, order or
decree applicable to the Company or any of its subsidiaries of any court,
regulatory body, administrative agency, governmental body, arbitrator or
other authority having jurisdiction over the Company or any of its
subsidiaries or any of its or their properties.
(t) NO DEFAULTS OR VIOLATIONS. Neither the Company nor any of its
subsidiaries is in violation or default of (i) any provision of its charter
or by-laws, (ii) the terms of any indenture, contract, lease, mortgage, deed
of trust, note agreement, loan agreement or other agreement, obligation,
condition, covenant or instrument to which it is a party or bound or to which
its property is subject or (iii) any statute, law, rule, regulation,
judgment, order or decree of any court, regulatory body, administrative
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agency, governmental body, arbitrator or other authority having jurisdiction
over the Company or such subsidiary or any of its properties, as applicable,
except any such violation or default which would not, singly or in the
aggregate, result in a Material Adverse Change except as otherwise disclosed
in the Prospectus.
(u) NO ACTIONS, SUITS OR PROCEEDINGS. No action, suit or proceeding
by or before any court or governmental agency, authority or body or any
arbitrator involving the Company or any of its subsidiaries or its or their
property is pending or, to the best knowledge of the Company, threatened that
(i) could reasonably be expected to have a Material Adverse Effect on the
performance of this Agreement or the consummation of any of the transactions
contemplated hereby or (ii) could reasonably be expected to result in a
Material Adverse Effect.
(v) ALL NECESSARY PERMITS, ETC. The Company and each of its
subsidiaries possess such valid and current certificates, authorizations or
permits issued by the appropriate state, federal or foreign regulatory
agencies or bodies necessary to conduct their respective businesses, and
neither the Company nor any subsidiary has received any notice of proceedings
relating to the revocation or modification of, or non-compliance with, any
such certificate, authorization or permit which, singly or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, could result in
a Material Adverse Change.
(w) TITLE TO PROPERTIES. The Company and each of its subsidiaries
has good and marketable title to all the properties and assets reflected as
owned in the financial statements referred to in Section 1(A)(i) above (or
elsewhere in the Prospectus), in each case free and clear of any security
interests, mortgages, liens, encumbrances, equities, claims and other
defects, except such as do not materially and adversely affect the value of
such property and do not materially interfere with the use made or proposed
to be made of such property by the Company or such subsidiary. The real
property, improvements, equipment and personal property held under lease by
the Company or any subsidiary are held under valid and enforceable leases,
with such exceptions as are not material and do not materially interfere with
the use made or proposed to be made of such real property, improvements,
equipment or personal property by the Company or such subsidiary.
(x) TAX LAW COMPLIANCE. The Company and its consolidated
subsidiaries have filed all necessary federal, state and foreign income and
franchise tax returns and have paid all taxes required to be paid by any of
them and, if due and payable, any related or similar assessment, fine or
penalty levied against any of them. The Company has made adequate charges,
accruals and reserves in the applicable financial statements referred to in
Section 1(A)(i) above in respect of all federal, state and foreign income and
franchise taxes for all periods as to which the tax liability of the Company
or any of its consolidated subsidiaries has not been finally determined. The
Company is not aware of any tax deficiency that has been or might be asserted
or threatened against the Company that could result in a Material Adverse
Change.
(y) INTELLECTUAL PROPERTY RIGHTS. Each of the Company and its
subsidiaries owns or possesses adequate rights to use all patents, patent
rights or licenses, inventions, collaborative research agreements, trade
secrets, know-how, trademarks,
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service marks, trade names and copyrights which are necessary to conduct its
businesses as described in the Registration Statement and Prospectus; the
expiration of any patents, patent rights, trade secrets, trademarks, service
marks, trade names or copyrights would not result in a Material Adverse
Change that is not otherwise disclosed in the Prospectus; the Company has not
received any notice of, and has no knowledge of, any infringement of or
conflict with asserted rights of the Company by others with respect to any
patent, patent rights, inventions, trade secrets, know-how, trademarks,
service marks, trade names or copyrights; and the Company has not received
any notice of, and has no knowledge of, any infringement of or conflict with
asserted rights of others with respect to any patent, patent rights,
inventions, trade secrets, know-how, trademarks, service marks, trade names
or copyrights which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, might have a Material Adverse
Change. There is no claim being made against the Company regarding patents,
patent rights or licenses, inventions, collaborative research, trade secrets,
know-how, trademarks, service marks, trade names or copyrights. The Company
and its subsidiaries do not in the conduct of their business as now or
proposed to be conducted as described in the Prospectus infringe or conflict
with any right or patent of any third party, or any discovery, invention,
product or process which is the subject of a patent application filed by any
third party, known to the Company or any of its subsidiaries, which such
infringement or conflict is reasonably likely to result in a Material Adverse
Change.
(z) YEAR 2000. There are no Year 2000 issues related to the
Company, or any of its subsidiaries, that (i) are of a character required to
be described or referred to in the Registration Statement or Prospectus by
the Securities Act or by the Exchange Act which have not been accurately
described in the Registration Statement or Prospectus or (ii) might
reasonably be expected to result in any Material Adverse Change or that might
materially affect their properties, assets or rights.
(aa) NO TRANSFER TAXES OR OTHER FEES. There are no transfer taxes or
other similar fees or charges under Federal law or the laws of any state, or
any political subdivision thereof, required to be paid in connection with the
execution and delivery of this Agreement or the issuance and sale by the
Company of the shares.
(bb) COMPANY NOT AN "INVESTMENT COMPANY." The Company has been
advised of the rules and requirements under the Investment Company Act of
1940, as amended (the "Investment Company Act"). The Company is not, and
after receipt of payment for the Shares will not be, an "investment company"
or an entity "controlled" by an "investment company" within the meaning of
the Investment Company Act and will conduct its business in a manner so that
it will not become subject to the Investment Company Act.
(cc) INSURANCE. Each of the Company and its subsidiaries are insured
by recognized, financially sound and reputable institutions with policies in
such amounts and with such deductibles and covering such risks as are
generally deemed adequate and customary for their businesses including, but
not limited to, policies covering real and personal property owned or leased
by the Company and its subsidiaries against theft, damage, destruction, acts
of vandalism and earthquakes, general liability and Directors and Officers
liability. The Company has no reason to believe that it or any
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subsidiary will not be able (i) to renew its existing insurance coverage as
and when such policies expire or (ii) to obtain comparable coverage from
similar institutions as may be necessary or appropriate to conduct its
business as now conducted and at a cost that would not result in a Material
Adverse Change. Neither of the Company nor any subsidiary has been denied any
insurance coverage which it has sought or for which it has applied.
(dd) LABOR MATTERS. To the best of Company's knowledge, no labor
disturbance by the employees of the Company or any of its subsidiaries exists
or is imminent; and the Company is not aware of any existing or imminent
labor disturbance by the employees of any of its principal suppliers,
contractors or distributors that might be expected to result in a Material
Adverse Change.
(ee) NO PRICE STABILIZATION OR MANIPULATION. The Company has not
taken and will not take, directly or indirectly, any action designed to or
that might be reasonably expected to cause or result in stabilization or
manipulation of the price of the Common Stock to facilitate the sale or
resale of the Shares.
(ff) LOCK-UP AGREEMENTS. Each officer and director of the company,
each Selling Stockholder and each beneficial owner of one or more percent of
the outstanding issued share capital of the Company has agreed to sign an
agreement substantially in the form attached hereto as EXHIBIT A (the
"Lock-up Agreements"). The Company has provided to counsel for the
Underwriters a complete and accurate list of all securityholders of the
Company and the number and type of securities held by each securityholder.
The Company has provided to counsel for the Underwriters true, accurate and
complete copies of all of the Lock-up Agreements presently in effect or
effected hereby. The Company hereby represents and warrants and agrees that
during the 90 days following the date of the Prospectus (the "Lock-Up
Period"), the Company will not (i) release any of its officers, directors or
other securityholders from any market stand-off agreements currently existing
or hereafter effected or (ii) consent to the removal of any
transfer-restrictive legend from any certificate representing any Common
Shares, in each case without the prior written consent of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
(gg) RELATED PARTY TRANSACTIONS. There are no business relationships
or related-party transactions involving the Company or any subsidiary or any
other person required to be described in the Prospectus which have not been
described as required.
(hh) NO UNLAWFUL CONTRIBUTIONS OR OTHER PAYMENTS. Neither the
Company nor any of its subsidiaries nor, to the best of the Company's
knowledge, any employee or agent of the Company or any subsidiary, has made
any contribution or other payment to any official of, or candidate for, any
federal, state or foreign office in violation of any law or of the character
required to be disclosed in the Prospectus.
(ii) ENVIRONMENTAL LAWS. The Company (i) is in compliance with all
rules, laws and regulations relating to the use, treatment, storage and
disposal of toxic substances and protection of health or the environment
("Environmental Laws") which are applicable to its business, except where the
failure to comply would not result in a Material Adverse Change, (ii) has
received no notice from any governmental authority or third party of an
asserted claim under Environmental Laws, which claim is required to be
9
disclosed in the Registration Statement and the Prospectus, (iii) is not
currently aware that it will be required to make future material capital
expenditures to comply with Environmental Laws and (iv) does not own, lease
or occupy property that has been designated as a Superfund site pursuant to
the Comprehensive Response, Compensation, and Liability Act of 1980, as
amended (42 U.S.C. Sections 9601, ET SEQ.), or otherwise designated as a
contaminated site under applicable state or local law.
(jj) PERIODIC REVIEW OF COSTS OF ENVIRONMENTAL COMPLIANCE. In the
ordinary course of its business, the Company conducts a periodic review of
the effect of Environmental Laws on the business, operations and properties
of the Company and its subsidiaries, in the course of which it identifies and
evaluates associated costs and liabilities (including, without limitation,
any capital or operating expenditures required for clean-up, closure of
properties or compliance with Environmental Laws or any permit, license or
approval, any related constraints on operating activities and any potential
liabilities to third parties). On the basis of such review and the amount of
its established reserves, the Company has reasonably concluded that such
associated costs and liabilities would not, individually or in the aggregate,
result in a Material Adverse Change.
(kk) ERISA COMPLIANCE. The Company and its subsidiaries and any
"employee benefit plan" (as defined under the Employee Retirement Income
Security Act of 1974, as amended, and the regulations and published
interpretations thereunder (collectively, "ERISA")) established or maintained
by the Company, its subsidiaries or their "ERISA Affiliates" (as defined
below) are in compliance in all material respects with ERISA. "ERISA
Affiliate" means, with respect to the Company or a subsidiary, any member of
any group of organizations described in Sections 414(b), (c), (m) or (o) of
the Internal Revenue Code of 1986, as amended, and the regulations and
published interpretations thereunder (the "Code") of which the Company or
such subsidiary is a member. No "reportable event" (as defined under ERISA)
has occurred or is reasonably expected to occur with respect to any "employee
benefit plan" established or maintained by the Company, its subsidiaries or
any of their ERISA Affiliates. No "employee benefit plan" established or
maintained by the Company, its subsidiaries or any of their ERISA Affiliates,
if such "employee benefit plan" were terminated, would have any "amount of
unfunded benefit liabilities" (as defined under ERISA). Neither the Company,
its subsidiaries nor any of their ERISA Affiliates has incurred or reasonably
expects to incur any liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any "employee benefit plan" or (ii)
Sections 412, 4971, 4975 or 4980B of the Code. Each "employee benefit plan"
established or maintained by the Company, its subsidiaries or any of their
ERISA Affiliates that is intended to be qualified under Section 401(a) of the
Code is so qualified and nothing has occurred, whether by action or failure
to act, which would cause the loss of such qualification.
(ll) EXCHANGE ACT COMPLIANCE. The documents incorporated or deemed
to be incorporated by reference in the Prospectus, at the time they were or
hereafter are filed with the Commission, complied and will comply in all
material respects with the requirements of the Exchange Act, and, when read
together with the other information in the Prospectus, at the time the
Registration Statement and any amendments thereto become effective and at the
First Closing Date and the Second Closing Date, as the case may be, will not
contain an untrue statement of a material fact or omit to state a
10
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(mm) EXCHANGE ACT REPORTS FILED. The Company has filed all reports
required to be filed purusant to the Securities Act and Exchange Act.
(nn) CONDITIONS FOR USE OF FORM S-3. The Company has satisfied the
conditions for the use of Form S-3, as set forth in the general instructions
thereto, with respect to the Registration Statement.
Any certificate signed by an officer of the Company and delivered to the
Representatives or to counsel for the Underwriters shall be deemed to be a
representation and warranty by the Company to each Underwriter as to the
matters set forth therein.
B. REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS.
Each Selling Stockholder represents, warrants and covenants to each
Underwriter as follows:
(a) THE UNDERWRITING AGREEMENT. This Agreement has been duly
authorized, executed and delivered by or on behalf of such Selling
Stockholder and is a valid and binding agreement of such Selling Stockholder,
enforceable in accordance with its terms, except as rights to indemnification
hereunder may be limited by applicable law and except as the enforcement
hereof may be limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws relating to or affecting the rights and remedies of
creditors or by general equitable principles.
(b) THE CUSTODY AGREEMENT AND POWER OF ATTORNEY. Each of the (i)
Custody Agreement signed by such Selling Stockholder and
[FENWICK & WEST TO PROVIDE], as custodian (the "Custodian"), relating to the
deposit of the Shares to be sold by such Selling Stockholder (the "Custody
Agreement") and (ii) Power of Attorney appointing certain individuals named
therein as such Selling Stockholder's attorneys-in-fact (each, an
"Attorney-in-Fact") to the extent set forth therein relating to the
transactions contemplated hereby and by the Prospectus (the "Power of
Attorney"), of such Selling Stockholder has been duly authorized, executed
and delivered by such Selling Stockholder and is a valid and binding
agreement of such Selling Stockholder, enforceable in accordance with its
terms, except as rights to indemnification thereunder may be limited by
applicable law and except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by general
equitable principles. Each Selling Stockholder agrees that the Shares to be
sold by such Selling Stockholder on deposit with the Custodian are subject to
the interests of the Underwriters, that the arrangements made for such
custody are to that extent irrevocable, and that the obligations of such
Selling Stockholder hereunder shall not be terminated, except as provided in
this Agreement or in the Custody Agreement, by any act of the Selling
Stockholder, by operation of law, by death or incapacity of such Selling
Stockholder or by the occurrence of any other event. If such Selling
Stockholder should die or become incapacitated, or in any other event should
occur, before the delivery of the Shares to be sold by such Selling
Stockholder hereunder, the documents evidencing the Shares to be sold by such
Selling Stockholder then on deposit with the Custodian shall be delivered
11
by the Custodian in accordance with the terms and conditions of this
Agreement as if such death, incapacity or other event had not occurred,
regardless of whether or not the Custodian shall have received notice thereof.
(c) TITLE TO SHARES TO BE SOLD. Such Selling Stockholder is the
lawful owner of the Shares to be sold by such Selling Stockholder hereunder
and upon sale and delivery of, and payment for, such Shares, as provided
herein, such Selling Stockholder will convey good and marketable title to
such Shares, free and clear of all liens, encumbrances, equities and claims
whatsoever.
(d) ALL AUTHORIZATIONS OBTAINED. Such Selling Stockholder has, and
on the First Closing Date (as defined below) and the Second Closing Date will
have, good and valid title to all of the Common Shares which may be sold by
such Selling Stockholder pursuant to this Agreement on such date and the
legal right and power, and all authorizations and approvals required by law
or other organizational documents to enter into this Agreement and its
Custody Agreement and Power of Attorney, to sell, transfer and deliver all of
the Shares which may be sold by such Selling Stockholder pursuant to this
Agreement and to comply with its other obligations hereunder and thereunder.
(e) NO FURTHER CONSENTS, AUTHORIZATION OR APPROVALS. No consent,
approval, authorization or order of any court or governmental agency or body
is required for the consummation by such Selling Stockholder of the
transactions contemplated herein, except such as may have been obtained under
the Securities Act and such as may be required under the federal and
provincial securities laws of Canada or the blue sky laws or any jurisdiction
in connection with the purchase and distribution of the Shares by the
Underwriters and such other approvals as have been obtained.
(f) NON-CONTRAVENTION. Neither the sale of the Securities being
sold by such Selling Stockholder nor the consummation of any other of the
transactions herein contemplated by such Selling Stockholder or the
fulfillment of the terms hereof by such Selling Stockholder will conflict
with, result in a breach or violation of, or constitute a default under any
law or the terms of any indenture or other agreement or instrument to which
such Selling Stockholder is party or bound, any judgment, order or decree
applicable to such Selling Stockholder or any court or regulatory body,
administrative agency, governmental body or arbitrator having jurisdiction
over such Selling Stockholder.
(g) NO REGISTRATION OR OTHER SIMILAR RIGHTS. Such Selling
Stockholder does not have any registration or other similar rights to have
any equity or debt securities registered for sale by the Company under the
Registration Statement or included in the offering contemplated by this
Agreement.
(h) NO PREEMPTIVE, CO-SALE OR OTHER RIGHTS. Such Selling
Stockholder does not have, or has waived prior to the date hereof, any
preemptive right, co-sale right or right of first refusal or other similar
right to purchase any of the Shares that are to be sold by the Company or any
of the other Selling Stockholders to the Underwriters pursuant to this
Agreement; and such Selling Stockholder does not own any warrants, options or
similar rights to acquire, and does not have any right or arrangement to
acquire, any
12
capital stock, right, warrants, options or other securities from the Company,
other than those described in the Registration Statement and the Prospectus.
(i) DISCLOSURE MADE BY SUCH SELLING STOCKHOLDER IN THE PROSPECTUS.
All information furnished by or on behalf of such Selling Stockholder in
writing expressly for use in the Registration Statement and Prospectus is,
and on the First Closing Date and the Second Closing Date will be, true,
correct, and complete in all material respects, and does not, and on the
First Closing Date and the Second Closing Date will not, contain any untrue
statement of a material fact or omit to state any material fact necessary to
make such information not misleading. Such Selling Stockholder confirms as
accurate the number of shares of Company Shares set forth opposite such
Selling Stockholder's name in the Prospectus under the caption "Principal and
Selling Stockholders" (both prior to and after giving effect to the sale of
the Shares).
(j) NO PRICE STABILIZATION OR MANIPULATION. Such Selling
Stockholder has not taken and will not take, directly or indirectly, any
action designed to or that might be reasonably expected to cause or result in
stabilization or manipulation of the price of the Common Stock to facilitate
the sale or resale of the Shares.
(k) NO TRANSFER TAXES OR OTHER FEES. There are no transfer taxes or
other similar fees or charges under Federal law or the laws of any state, or
any political subdivision thereof, required to be paid in connection with the
execution and delivery of this Agreement or the sale by the Selling
Stockholders of the Shares.
(l) DISTRIBUTION OF OFFERING MATERIALS BY THE SELLING STOCKHOLDERS.
The Selling Stockholders have not distributed and will not distribute, prior
to the later of the Second Closing Date (as defined below) and the completion
of the Underwriters' distribution of the Shares, any offering material in
connection with the offering and sale of the Shares by such Selling
Stockholder other than a preliminary prospectus, the Prospectus or the
Registration Statement.
(m) NO MATERIAL UNDISCLOSED INSIDE INFORMATION. Such Selling
Stockholder is not prompted to sell the Shares to be sold by such Selling
Stockholder by any information concerning the Company which is not set forth
in the Registration Statement and the Prospectus.
(n) CONFIRMATION OF COMPANY REPRESENTATIONS AND WARRANTIES. Such
Selling Stockholder has no reason to believe that the representations and
warranties of the Company contained in Section 1(A) hereof are not true and
correct, is familiar with the Registration Statement and the Prospectus and
has no knowledge of any material fact, condition or information not disclosed
in the Registration Statement or the Prospectus which has had or may result
in a Material Adverse Change on the condition, financial or otherwise, or on
the earnings, business, operation or prospects, whether or not arising from
transactions in the ordinary course of business of the Company and its
subsidiaries, considered as one entity, and is not prompted to sell the
Shares to be sold by such Selling Stockholder by any information concerning
the Company which is not set forth in the Registration Statement and the
Prospectus.
13
Any certificate signed by or on behalf of any Selling Stockholder
and delivered to the Representatives or to counsel for the Underwriters shall
be deemed to be a representation and warranty by such Selling Stockholder to
each Underwriter as to the matters covered thereby.
SECTION 2. PURCHASE, SALE AND DELIVERY OF THE SHARES.
(a) THE FIRM SHARES. Upon the terms herein set forth, (i) the
Company agrees to issue and sell to the several Underwriters an aggregate of
1,520,000 Firm Shares and (ii) the Selling Stockholders agree to sell to the
several Underwriters an aggregate of 80,000 Firm Shares, each Selling
Stockholder selling the number of Firm Shares set forth opposite such Selling
Stockholder's name on SCHEDULE B. On the basis of the representations,
warranties and agreements herein contained, and upon the terms but subject to
the conditions herein set forth, the Underwriters agree, severally and not
jointly, to purchase from the Company and the Selling Stockholders the
respective number of Firm Shares set forth opposite their names on SCHEDULE
A. The purchase price per Firm Share to be paid by the several Underwriters
to the Company and the Selling Stockholders shall be $[___] per share.
(b) THE FIRST CLOSING DATE. Delivery of the Firm Shares to be
purchased by the Underwriters and payment therefor shall be made by the
Company and the Representatives at 6:00 a.m. San Francisco time, at the
offices of Fenwick & West LLP, Two Palo Alto Square, Palo Alto, California
94306 (or at such other place and time as may be agreed upon among the
Representatives and the Company), (i) on the third (3rd) full business day
following the first day that Shares are traded, (ii) if this Agreement is
executed and delivered after 1:30 P.M., San Francisco time, the fourth (4th)
full business day following the day that this Agreement is executed and
delivered or (iii) at such other time and date not later than seven (7) full
business days following the first day that Shares are traded as the
Representatives and the Company may determine (or at such time and date to
which payment and delivery shall have been postponed pursuant to Section 8
hereof), such time and date of payment and delivery being herein called the
"First Closing Date;" PROVIDED, HOWEVER, that if the Company has not made
available to the Representatives copies of the Prospectus within the time
provided in Section 2(g) and 3(e) hereof, the Representatives may, in their
sole discretion, postpone the Closing Date until no later than two (2) full
business days following delivery of copies of the Prospectus to the
Representatives.
(c) THE OPTION SHARES; THE SECOND CLOSING DATE. In addition, on the
basis of the representations, warranties and agreements herein contained, and
upon the terms but subject to the conditions herein set forth, the Company
hereby grants an option to the several Underwriters to purchase, severally
and not jointly, up to an aggregate of 240,000 Option Shares from the Company
at the purchase price per share to be paid by the Underwriters for the Firm
Shares. The option granted hereunder is for use by the Underwriters solely in
covering any over-allotments in connection with the sale and distribution of
the Firm Shares. The option granted hereunder may be exercised at any time
upon notice by the Representatives to the Company, which notice may be given
at any time within 30 days from the date of this Agreement. The time and date
of delivery of the Option Shares, if subsequent to the First Closing Date, is
called the "Second Closing Date" and shall be determined by the
Representatives and shall not be earlier
14
than three nor later than five full business days after delivery of such
notice of exercise. If any Option Shares are to be purchased, each
Underwriter agrees, severally and not jointly, to purchase the number of
Option Shares (subject to such adjustments to eliminate fractional shares as
the Representatives may determine) that bears the same proportion to the
total number of Option Shares to be purchased as the number of Firm Shares
set forth on SCHEDULE A opposite the name of such Underwriter. The
Representatives may cancel the option at any time prior to its expiration by
giving written notice of such cancellation to the Company.
(d) PUBLIC OFFERING OF THE SHARES. The Representatives hereby
advise the Company and the Selling Stockholders that the Underwriters intend
to offer for sale to the public, as described in the Prospectus, their
respective portions of the Shares as soon after this Agreement has been
executed and the Registration Statement has been declared effective as the
Representatives, in their sole judgment, have determined is advisable and
practicable.
(e) PAYMENT FOR THE SHARES. Payment for the Shares to be sold by
the Company shall be made at the First Closing Date (and, if applicable, at
the Second Closing Date) by wire transfer of immediately available funds to
the order of the Company. Payment for the Shares to be sold by the Selling
Stockholders shall be made at the First Closing Date (and, if applicable, at
the Second Closing Date) by wire transfer of immediately available funds to
the order of the Custodian.
It is understood that the Representatives have been authorized,
for their own accounts and the accounts of the several Underwriters, to
accept delivery of and receipt for, and make payment of the purchase price
for, the Firm Shares and any Option Shares the Underwriters have agreed to
purchase. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, individually and not as a Representative of the
Underwriters, may (but shall not be obligated to) make payment for any Shares
to be purchased by any Underwriter whose funds shall not have been received
by the Representatives by the First Closing Date or the Second Closing Date,
as the case may be, for the account of such Underwriter, but any such payment
shall not relieve such Underwriter from any of its obligations under this
Agreement.
Each Selling Stockholder hereby agrees that (i) it will pay all
stock transfer taxes, stamp duties and other similar taxes, if any, payable
upon the sale or delivery of the Shares to be sold by such Selling
Stockholder to the several Underwriters, or otherwise in connection with the
performance of such Selling Stockholder's obligations hereunder and (ii) the
Custodian is authorized to deduct for such payment any such amounts from the
proceeds to such Selling Stockholder hereunder and to hold such amounts for
the account of such Selling Stockholder with the Custodian under the Custody
Agreement.
(f) DELIVERY OF THE SHARES. The Company and the Selling
Stockholders shall deliver, or cause to be delivered a credit representing
the Firm Shares to an account or accounts at The Depository Trust Company as
designated by the Representatives for the accounts of the Representatives and
the several Underwriters at the First Closing Date, against the irrevocable
release of a wire transfer of immediately available funds for the amount of
the purchase price therefor. The Company shall also deliver, or cause to
15
be delivered a credit representing the Option Shares to an account or
accounts at The Depository Trust Company as designated by the Representatives
for the accounts of the Representatives and the several Underwriters, at the
First Closing Date or the Second Closing Date, as the case may be, against
the irrevocable release of a wire transfer of immediately available funds for
the amount of the purchase price therefor. Time shall be of the essence, and
delivery at the time and place specified in this Agreement is a further
condition to the obligations of the Underwriters.
(g) DELIVERY OF PROSPECTUS TO THE UNDERWRITERS. Not later than
12:00 noon on the second business day following the date the Shares are
released by the Underwriters for sale to the public, the Company shall
deliver or cause to be delivered copies of the Prospectus in such quantities
and at such places as the Representatives shall request.
SECTION 3. COVENANTS OF THE COMPANY AND THE SELLING STOCKHOLDERS.
A. COVENANTS OF THE COMPANY. The Company further covenants and
agrees with each Underwriter as follows:
(a) REGISTRATION STATEMENT MATTERS. The Company will (i) use its
best efforts to cause a registration statement on Form 8-A (the "Form 8-A
Registration Statement") as required by the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), to become effective simultaneously with the
Registration Statement, (ii) use its best efforts to cause the Registration
Statement to become effective or, if the procedure in Rule 430A of the
Securities Act is followed, to prepare and timely file with the Commission
under Rule 424(b) under the Securities Act a Prospectus in a form approved by
the Representatives containing information previously omitted at the time of
effectiveness of the Registration Statement in reliance on Rule 430A of the
Securities Act and (iii) not file any amendment to the Registration Statement
or supplement to the Prospectus of which the Representatives shall not
previously have been advised and furnished with a copy or to which the
Representatives shall have reasonably objected in writing or which is not in
compliance with the Securities Act. If the Company elects to rely on Rule
462(b) under the Securities Act, the Company shall file a Rule 462(b)
Registration Statement with the Commission in compliance with Rule 462(b)
under the Securities Act prior to the time confirmations are sent or given,
as specified by Rule 462(b)(2) under the Securities Act, and shall pay the
applicable fees in accordance with Rule 111 under the Securities Act.
(b) SECURITIES ACT COMPLIANCE. The Company will advise the
Representatives promptly (i) when the Registration Statement or any
post-effective amendment thereto shall have become effective, (ii) of receipt
of any comments from the Commission, (iii) of any request of the Commission
for amendment of the Registration Statement or for supplement to the
Prospectus or for any additional information and (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the use of the Prospectus or of the institution of any
proceedings for that purpose. The Company will use its best efforts to
prevent the issuance of any such stop order preventing or suspending the use
of the Prospectus and to obtain as soon as possible the lifting thereof, if
issued.
16
(c) BLUE SKY COMPLIANCE. The Company will cooperate with the
Representatives and counsel for the Underwriters in endeavoring to qualify
the Shares for sale under the securities laws of such jurisdictions (both
national and foreign) as the Representatives may reasonably have designated
in writing and will make such applications, file such documents, and furnish
such information as may be reasonably required for that purpose, PROVIDED the
Company shall not be required to qualify as a foreign corporation or to file
a general consent to service of process in any jurisdiction where it is not
now so qualified or required to file such a consent. The Company will, from
time to time, prepare and file such statements, reports and other documents,
as are or may be required to continue such qualifications in effect for so
long a period as the Representatives may reasonably request for distribution
of the Shares.
(d) AMENDMENTS AND SUPPLEMENTS TO THE PROSPECTUS AND OTHER
SECURITIES ACT MATTERS. The Company will comply with the Securities Act and
the Exchange Act, and the rules and regulations of the Commission thereunder,
so as to permit the completion of the distribution of the Shares as
contemplated in this Agreement and the Prospectus. If during the period in
which a prospectus is required by law to be delivered by an Underwriter or
dealer, any event shall occur as a result of which, in the judgment of the
Company or in the reasonable opinion of the Representatives or counsel for
the Underwriters, it becomes necessary to amend or supplement the Prospectus
in order to make the statements therein, in the light of the circumstances
existing at the time the Prospectus is delivered to a purchaser, not
misleading, or, if it is necessary at any time to amend or supplement the
Prospectus to comply with any law, the Company promptly will prepare and file
with the Commission, and furnish at its own expense to the Underwriters and
to dealers, an appropriate amendment to the Registration Statement or
supplement to the Prospectus so that the Prospectus as so amended or
supplemented will not, in the light of the circumstances when it is so
delivered, be misleading, or so that the Prospectus will comply with the law.
(e) COPIES OF THE PROSPECTUS, ELECTRONIC PROSPECTUS AND ANY
AMENDMENTS AND SUPPLEMENTS THERETO. The Company agrees to furnish the
Representatives, without charge, during the period beginning on the date
hereof and ending on the later of the First Closing Date or such date, as in
the opinion of counsel for the Underwriters, the Prospectus is no longer
required by law to be delivered in connection with sales by an Underwriter or
dealer (the "Prospectus Delivery Period"), as many copies of the Prospectus
and any amendments and supplements thereto (including any documents
incorporated or deemed incorporated by reference therein) as the
Representatives may request. The Company shall also cause to be prepared and
delivered to any Underwriter upon request, at the Company's expense, within
one business day from the filing of the Prospectus with the Commission (and
again within one business day after the filing of any amendment or supplement
thereto with the Commission), an "electronic Prospectus" to be used in
connection with the offering and sale of the Shares. As used herein, the term
"electronic Prospectus" means a form of Prospectus, and any amendment or
supplement thereto, that meets each of the following conditions: (i) it shall
be encoded in a format, satisfactory to the Representatives, that may be
transmitted electronically over the internet or via other online distribution
to offerees and purchasers of the Shares; and (ii) it shall disclose the same
information as the paper Prospectus (or any amendment or supplement thereto),
except to the extent that graphic and image material contained in the paper
Prospectus (or such amendment or supplement) cannot be presented in such
17
electronic format, in which case such graphic and image material shall be
replaced in the electronic Prospectus with a fair and accurate narrative
description or tabular representation of such material, as appropriate. The
Company hereby consents to distribution of the electronic Prospectus
(including posting of the electronic Prospectus on the internet) by any of
the Underwriters or their affiliates.
(f) INSURANCE. The Company shall (i) obtain Directors and Officers
liability insurance in the minimum amount of $10 million which shall apply to
the offering contemplated hereby, (ii) cause FleetBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Inc. to be added to such policy such that up to $500,000 of its expenses
pursuant to Section 7(a) shall be paid directly by such insurer and (iii)
cause FleetBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc. to be added as an additional
insured to such policy in respect of the offering contemplated hereby.
(g) NOTICE OF SUBSEQUENT EVENTS. If at any time during the ninety
(90) day period after the Registration Statement becomes effective, any
rumor, publication or event relating to or affecting the Company shall occur
as a result of which in your opinion the market price of the Company Shares
has been or is likely to be materially affected (regardless of whether such
rumor, publication or event necessitates a supplement to or amendment of the
Prospectus), the Company will, after written notice from the Representatives
advising the Company to the effect set forth above, forthwith prepare,
consult with the Representatives concerning the substance of and disseminate
a press release or other public statement, reasonably satisfactory to the
Representatives, responding to or commenting on such rumor, publication or
event.
(h) USE OF PROCEEDS. The Company shall apply the net proceeds from
the sale of the Shares sold by it in the manner described under the caption
"Use of Proceeds" in the Prospectus.
(i) TRANSFER AGENT. The Company shall engage and maintain, at its
expense, a registrar and transfer agent for the Company Shares.
(j) EARNINGS STATEMENT. As soon as practicable, the Company will
make generally available to its security holders and to the Representatives
an earnings statement (which need not be audited) covering a period of at
least twelve months beginning after the effective date of the Registration
Statement that satisfies the provisions of Section 11(a) of the Securities
Act.
(k) PERIODIC REPORTING OBLIGATIONS. During the Prospectus Delivery
Period the Company shall file, on a timely basis, with the Commission and the
Nasdaq all reports and documents required to be filed under the Exchange Act
within the time periods required by the Exchange Act and the rules of the
Nasdaq.
(l) AGREEMENT NOT TO OFFER OR SELL ADDITIONAL SECURITIES. The
Company will not offer, sell or contract to sell, or otherwise dispose of or
enter into any transaction which is designed to, or could be expected to,
result in the disposition (whether by actual disposition or effective
economic disposition due to cash settlement or otherwise by the Company or
any affiliate of the Company or any person in privity with the Company or any
affiliate of the Company) directly or indirectly, or announce the offering
of, any other
18
Common Shares or any securities convertible into, or exchangeable for, Common
Shares; PROVIDED, HOWEVER, that the Company may (i) issue and sell Common
Shares pursuant to any director or employee stock option plan, stock
ownership plan or dividend reinvestment plan of the Company in effect at the
date of the Prospectus and described in the Prospectus so long as none of
those shares may be transferred and the Company shall enter stop transfer
instructions with its transfer agent and registrar against the transfer of
any such Common Shares and (ii) the Company may issue Common Shares issuable
upon the conversion of securities or the exercise of warrants outstanding at
the date of the Prospectus and described in the Prospectus. These
restrictions terminate after the close of trading of the Shares on the final
day of the Lock-Up Period.
(m) FUTURE REPORTS TO THE REPRESENTATIVES. During the period of
five years hereafter the Company will furnish to the Representatives (i) as
soon as practicable after the end of each fiscal year, copies of the Annual
Report of the Company containing the balance sheet of the Company as of the
close of such fiscal year and statements of income, stockholders' equity and
cash flows for the year then ended and the opinion thereon of the Company's
independent public or certified public accountants; (ii) as soon as
practicable after the filing thereof, copies of each proxy statement, Annual
Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form
8-K or other report filed by the Company with the Commission, the NASD or any
securities exchange; and (iii) as soon as available, copies of any report or
communication of the Company mailed generally to holders of its capital stock.
B. COVENANTS OF THE SELLING STOCKHOLDERS. Each Selling Stockholder
further covenants and agrees with each Underwriter:
(a) AGREEMENT NOT TO OFFER OR SELL ADDITIONAL SECURITIES. Such
Selling Stockholder will not, during the Lock-Up Period, make a disposition
of Securities (as defined in EXHIBIT A hereto) now owned or hereafter
acquired directly by such person or with respect to which such person has or
hereafter acquires the power of disposition, otherwise than (i) as a bona
fide gift or gifts, provided the donee or donees thereof agree in writing to
be bound by this restriction, (ii) as a distribution to partners or
shareholders of such person, provided that the distributees thereof agree in
writing to be bound by the terms of this restriction, (iii) with respect to
dispositions of Common Shares acquired on the open market or (iv) with the
prior written consent of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇. The foregoing restriction has
been expressly agreed to preclude the holder of the Securities from engaging
in any hedging or other transaction which is designed to or reasonably
expected to lead to or result in a disposition of Securities during the
Lock-Up Period, even if such Securities would be disposed of by someone other
than such holder. Such prohibited hedging or other transactions would
include, without limitation, any short sale (whether or not against the box)
or any purchase, sale or grant of any right (including, without limitation,
any put or call option) with respect to any Securities or with respect to any
security (other than a broad-based market basket or index) that includes,
relates to or derives any significant part of its value from Securities.
Furthermore, such Selling Stockholder also agrees and consents to the entry
of stop transfer instructions with the Company's transfer agent against the
transfer of the Securities held by such Selling Stockholder except in
compliance with this restriction.
19
(b) DELIVERY OF FORMS W-8 AND W-9. To deliver to the
Representatives prior to the First Closing Date a properly completed and
executed United States Treasury Department Form W-8 (if the Selling
Stockholder is a non-United States person) or Form W-9 (if the Selling
Stockholder is a United States Person).
(c) NOTIFICATION OF UNTRUE STATEMENTS, ETC. If, at any time prior
to the date on which the distribution of the Common Shares as contemplated
herein and in the Prospectus has been completed, as determined by the
Representatives, such Selling Stockholder has knowledge of the occurrence of
any event as a result of which the Prospectus or the Registration Statement,
in each case 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 light of the circumstances under which they
were made, not misleading, such Selling Stockholder will promptly notify the
Company and the Representatives in writing.
SECTION 4. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS.
The obligations of the several Underwriters to purchase and pay
for the Shares as provided herein on the First Closing Date and, with respect
to the Option Shares, the Second Closing Date, shall be subject to the
accuracy of the representations and warranties on the part of the Company and
the Selling Stockholders set forth in Sections 1(A) and 1(B) hereof as of the
date hereof and as of the First Closing Date as though then made and, with
respect to the Option Shares, as of the Second Closing Date as though then
made, to the timely performance by the Company and the Selling Stockholders
of their respective covenants and other obligations hereunder, and to each of
the following additional conditions:
(a) COMPLIANCE WITH REGISTRATION REQUIREMENTS; NO STOP ORDER; NO
OBJECTION FROM THE NASD. The Registration Statement shall have become
effective prior to the execution of this Agreement, or at such later date as
shall be consented to in writing by you; and no stop order suspending the
effectiveness thereof shall have been issued and no proceedings for that
purpose shall have been initiated or, to the knowledge of the Company, any
Selling Stockholder or any Underwriter, threatened by the Commission, and any
request of the Commission for additional information (to be included in the
Registration Statement or the Prospectus or any Incorporated Document or
otherwise) shall have been complied with to the satisfaction of Underwriters'
Counsel; and the NASD shall have raised no objection to the fairness and
reasonableness of the underwriting terms and arrangements.
(b) CORPORATE PROCEEDINGS. All corporate proceedings and other
legal matters in connection with this Agreement, the form of Registration
Statement and the Prospectus, and the registration, authorization, issue,
sale and delivery of the Shares, shall have been reasonably satisfactory to
Underwriters' Counsel, and such counsel shall have been furnished with such
papers and information as they may reasonably have requested to enable them
to pass upon the matters referred to in this Section.
(c) NO MATERIAL ADVERSE CHANGE. Subsequent to the execution and
delivery of this Agreement and prior to the First Closing Date, or the Second
Closing Date, as the case may be there shall not have been any Material
Adverse Change in the condition
20
(financial or otherwise), earnings, operations, business or business
prospects of the Company and its subsidiaries considered as one enterprise
from that set forth in the Registration Statement or Prospectus, which, in
your sole judgment, is material and adverse and that makes it, in your sole
judgment, impracticable or inadvisable to proceed with the public offering of
the Shares as contemplated by the Prospectus.
(d) OPINION OF COUNSEL FOR THE COMPANY. You shall have received on
the First Closing Date, or the Second Closing Date, as the case may be, an
opinion of Fenwick & West LLP counsel for the Company substantially in the
form of EXHIBIT B attached hereto, dated the First Closing Date, or the
Second Closing Date, addressed to the Underwriters and with reproduced copies
or signed counterparts thereof for each of the Underwriters.
Counsel rendering the opinion contained in EXHIBIT B may rely
as to questions of law not involving the laws of the United States, the State
of California or the State of Delaware upon opinions of local counsel, and as
to questions of fact upon representations or certificates of officers of the
Company, the Selling Stockholders and of government officials, in which case
their opinion is to state that they are so relying and that they have no
knowledge of any material misstatement or inaccuracy in any such opinion,
representation or certificate. Copies of any opinion, representation or
certificate so relied upon shall be delivered to you, as Representatives of
the Underwriters, and to Underwriters' Counsel.
(e) OPINION OF INTELLECTUAL PROPERTY COUNSEL FOR THE COMPANY. You
shall have received on the First Closing Date, or the Second Closing Date, as
the case may be, an opinion of Fliesler, Dubb, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP,
intellectual property counsel for the Company substantially in the form of
EXHIBIT C attached hereto.
(f) OPINION OF COUNSEL FOR THE UNDERWRITERS. You shall have
received on the First Closing Date or the Second Closing Date, as the case
may be, an opinion of O'Melveny & ▇▇▇▇▇ LLP, counsel for the Underwriters, in
form and substance reasonably satisfactory to the Representatives, with
respect to the sufficiency of all corporate proceedings and other legal
matters relating to this Agreement and the transactions contemplated hereby
as the Representatives may reasonably require. The Company shall have
furnished to such counsel such documents as they may have requested for the
purpose of enabling them to pass upon such matters.
(g) ACCOUNTANTS' COMFORT LETTER. You shall have received on the
First Closing Date and on the Second Closing Date, as the case may be, a
letter from Deloitte & Touche LLP addressed to the Underwriters, dated the
First Closing Date or the Second Closing Date, as the case may be, confirming
that they are independent certified public accountants with respect to the
Company within the meaning of the Securities Act and the applicable published
Rules and Regulations and based upon the procedures described in such letter
delivered to you concurrently with the execution of this Agreement (herein
called the "Original Letter"), but carried out to a date not more than four
(4) business days prior to the First Closing Date or the Second Closing Date,
as the case may be, (i) confirming, to the extent true, that the statements
and conclusions set forth in the Original Letter are accurate as of the First
Closing Date or the Second Closing Date, as the case may be, and (ii) setting
forth any revisions and additions to the
21
statements and conclusions set forth in the Original Letter which are
necessary to reflect any changes in the facts described in the Original
Letter since the date of such letter, or to reflect the availability of more
recent financial statements, data or information. The letter shall not
disclose any change in the condition (financial or otherwise), earnings,
operations, business or business prospects of the Company and its
subsidiaries considered as one enterprise from that set forth in the
Registration Statement or Prospectus, which, in your sole judgment, is
material and adverse and that makes it, in your sole judgment, impracticable
or inadvisable to proceed with the public offering of the Shares as
contemplated by the Prospectus. The Original Letter from Deloitte & Touche
LLP shall be addressed to or for the use of the Underwriters in form and
substance satisfactory to the Underwriters and shall (i) represent, to the
extent true, that they are independent certified public accountants with
respect to the Company within the meaning of the Securities Act and the
applicable published Rules and Regulations, (ii) set forth their opinion with
respect to their examination of the consolidated balance sheet of the Company
as of September 30 1999, and related consolidated statements of operations,
shareholders' equity, and cash flows for the twelve (12) months ended
September 30, 1999, (iii) state that Deloitte & Touche LLP has performed the
procedures set out in Statement on Auditing Standards ("SAS") No. 71 for a
review of interim financial information and providing the report of Deloitte
& Touche LLP as described in SAS No. 71 on the financial statements for each
of the quarters in the eight quarter periods ended June 30, 2000 (the
"Quarterly Financial Statements"), (iv) state that in the course of such
review, nothing came to their attention that leads them to believe that any
material modifications need to be made to any of the Quarterly Financial
Statements in order for them to be in compliance with generally accepted
accounting principles consistently applied across the periods presented, (v)
state that Deloitte & Touche LLP has performed the procedures set forth in
Statement on Standards for Attestation Engagements No. 8 on the information
included in the Prospectus under the caption "Management's Discussion and
Analysis of Financial Conditions and Results of Operations" and describe or
attach their report thereon (as described by SAS No. 86) and (vi) address
other matters agreed upon by Deloitte & Touche LLP and you. In addition, you
shall have received from Deloitte & Touche LLP a letter addressed to the
Company and made available to you for the use of the Underwriters stating
that their review of the Company's system of internal accounting controls, to
the extent they deemed necessary in establishing the scope of their
examination of the Company's consolidated financial statements as of
September 30, 2000, did not disclose any weaknesses in internal controls that
they considered to be material weaknesses.
(h) OFFICERS' CERTIFICATE. You shall have received on the First
Closing Date and the Second Closing Date, as the case may be, a certificate
of the Company, dated the First Closing Date or the Second Closing Date, as
the case may be, signed by the Chief Executive Officer and Chief Financial
Officer of the Company, to the effect that, and you shall be satisfied that:
(i) The representations and warranties of the Company in this
Agreement are true and correct, as if made on and as of the First Closing
Date or the Second Closing Date, as the case may be, and the Company has
complied with all the agreements and satisfied all the conditions on its
part to be performed or satisfied at or prior to the First Closing Date
or the Second Closing Date, as the case may be;
22
(ii) No stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or are pending or threatened under the
Securities Act;
(iii) When the Registration Statement became effective and at
all times subsequent thereto up to the delivery of such certificate, (a)
the Registration Statement and the Prospectus, and any amendments or
supplements thereto and the Incorporated Documents, when such
Incorporated Documents became effective or were filed with the
Commission, contained all material information required to be included
therein by the Securities Act or the Exchange Act and the applicable
rules and regulations of the Commission thereunder, as the case may be,
and in all material respects conformed to the requirements of the
Securities Act or the Exchange Act and the applicable rules and
regulations of the Commission thereunder, as the case may be, (b) the
Registration Statement and the Prospectus, and any amendments or
supplements thereto, did not and does not include any untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and
(c) since the effective date of the Registration Statement, there
has occurred no event required to be set forth in an amended or
supplemented Prospectus which has not been so set forth; and
(iv) Subsequent to the respective dates as of which information
is given in the Registration Statement and Prospectus, there has not
been (a) any material adverse change in the condition (financial or
otherwise, earnings, operations, business or business prospects of the
Company and its subsidiaries considered as one enterprise, (b) any
transaction that is material to the Company and its subsidiaries
considered as one enterprise, except transactions entered into in the
ordinary course of business, (c) any obligation, direct or contingent,
that is material to the Company and its subsidiaries considered as one
enterprise, incurred by the Company or its subsidiaries, except
obligations incurred in the ordinary course of business, (d) any change
in the capital stock or outstanding indebtedness of the Company or any of
its subsidiaries that is material to the Company and its subsidiaries
considered as one enterprise, (e) any dividend or distribution of any
kind declared, paid or made on the capital stock of the Company or any of
its subsidiaries, or (f) any loss or damage (whether or not insured) to
the property of the Company or any of its subsidiaries which has been
sustained or will have been sustained which has a material adverse effect
on the condition (financial or otherwise), earnings, operations, business
or business prospects of the Company and its subsidiaries considered as
one enterprise.
(i) LOCK-UP AGREEMENT FROM CERTAIN STOCKHOLDERS OF THE COMPANY. The
Company shall have obtained and delivered to you an agreement substantially
in the form of EXHIBIT A attached hereto from each officer and director of
the Company, each Selling Stockholder and each beneficial owner of one or
more percent of the outstanding issued share capital of the Company.
(j) OPINION OF COUNSEL FOR THE SELLING STOCKHOLDERS. You shall have
received on the First Closing Date and the Second Closing Date, as the case
may be, an opinion
23
of Fenwick & West LLP, counsel for the Selling Stockholders substantially in
the form of EXHIBIT D hereto.
In rendering such opinion, such counsel may rely as to
questions of law not involving the laws of the United States, the State of
California or the State of Delaware upon opinions of local counsel and as to
questions of fact upon representations or certificates of the Selling
Stockholders or officers of the Selling Stockholders (when the Selling
Stockholder is not a natural person), and of governmental officials, in which
case their opinion is to state that they are so relying and that they have no
knowledge of any material misstatement or inaccuracy of any material
misstatement or inaccuracy in any such opinion, representation or certificate
so relied upon shall be delivered to you, as Representatives of the
Underwriters, and to Underwriters' Counsel.
(k) SELLING STOCKHOLDERS' CERTIFICATE. On each of the First Closing
Date and the Second Closing Date, as the case may be, the Representatives
shall received a written certificate executed by the Attorney-in-Fact of each
Selling Stockholder, dated as of such Closing Date, to the effect that:
(i) the representations, warranties and covenants of such
Selling Stockholder set forth in Section 1(B) of this Agreement are true
and correct with the same force and effect as though expressly made by
such Selling Stockholder on and as of such Closing Date; and
(ii) such Selling Stockholder has complied with all the
agreements and satisfied all the conditions on its part to be performed
or satisfied at or prior to such Closing Date.
(l) SELLING STOCKHOLDERS' DOCUMENTS. At least three (3) business
days prior to the date hereof, the Company and the Selling Stockholders shall
have furnished for review by the Representatives copies of the Powers of
Attorney and Custody Agreements executed by each of the Selling Stockholders
and such further information, certificates and documents as the
Representatives may reasonably request.
(m) STOCK EXCHANGE LISTING. The Shares shall have been approved for
inclusion on the Nasdaq, subject only to official notice of issuance.
(n) COMPLIANCE WITH PROSPECTUS DELIVERY REQUIREMENTS. The Company
shall have complied with the provisions of Sections 2(g) and 3(e) hereof with
respect to the furnishing of Prospectuses.
(o) ADDITIONAL DOCUMENTS. On or before each of the First Closing
Date and the Second Closing Date, as the case may be, the Representatives and
counsel for the Underwriters shall have received such information, documents
and opinions as they may reasonably require for the purposes of enabling them
to pass upon the issuance and sale of the Shares as contemplated herein, or
in order to evidence the accuracy of any of the representations and
warranties, or the satisfaction of any of the conditions or agreements,
herein contained.
24
If any condition specified in this Section 4 is not satisfied
when and as required to be satisfied, this Agreement may be terminated by the
Representatives by notice to the Company and the Selling Stockholders at any
time on or prior to the First Closing Date and, with respect to the Option
Shares, at any time prior to the Second Closing Date, which termination shall
be without liability on the part of any party to any other party, except that
Section 5 (Payment of Expenses), Section 6 (Reimbursement of Underwriters'
Expenses), Section 7 (Indemnification and Contribution) and Section 10
(Representations and Indemnities to Survive Delivery) shall at all times be
effective and shall survive such termination.
SECTION 5. PAYMENT OF EXPENSES.
The Company and the Selling Stockholders, jointly and
severally, agree to pay in such proportions as they may agree upon among
themselves all costs, fees and expenses incurred in connection with the
performance of their obligations hereunder and in connection with the
transactions contemplated hereby, including without limitation (i) all
expenses incident to the issuance and delivery of the Shares (including all
printing and engraving costs), (ii) all fees and expenses of the registrar
and transfer agent of the Common Shares, (iii) all necessary issue, transfer
and other stamp taxes in connection with the issuance and sale of the Shares
to the Underwriters, (iv) all fees and expenses of the Company's counsel,
independent public or certified public accountants and other advisors, (v)
all costs and expenses incurred in connection with the preparation, printing,
filing, shipping and distribution of the Registration Statement (including
financial statements, exhibits, schedules, consents and certificates of
experts), each preliminary prospectus and the Prospectus, and all amendments
and supplements thereto, and this Agreement, (vi) all filing fees, attorneys'
fees and expenses incurred by the Company or the Underwriters in connection
with qualifying or registering (or obtaining exemptions from the
qualification or registration of) all or any part of the Shares for offer and
sale under the state securities or blue sky laws or the provincial securities
laws of Canada or any other country, and, if requested by the
Representatives, preparing and printing a "Blue Sky Survey," an
"International Blue Sky Survey" or other memorandum, and any supplements
thereto, advising the Underwriters of such qualifications, registrations and
exemptions, (vii) the filing fees incident to, and the reasonable fees and
expenses of counsel for the Underwriters in connection with, the NASD review
and approval of the Underwriters' participation in the offering and
distribution of the Common Shares, (viii) the fees and expenses associated
with including the Shares on the Nasdaq, (ix) all costs and expenses incident
to the travel and accommodation of the Company's employees on the "roadshow,"
and (x) all other fees, costs and expenses referred to in Item 14 of Part II
of the Registration Statement. Except as provided in this Section 5, Section
6, and Section 7 hereof, the Underwriters shall pay their own expenses,
including the fees and disbursements of their counsel. The Selling
Stockholders further agree with each Underwriter to pay (directly or by
reimbursement) all fees and expenses incident to the performance of their
obligations under this Agreement which are not otherwise specifically
provided for herein, including but not limited to (a) fees and expenses of
counsel and other advisors for such Selling Stockholders, (b) fees and
expenses of the Custodian and (c) expenses and taxes incident to the sale and
delivery of the Common Shares to be sold by such Selling Stockholders to the
Underwriters
25
hereunder (which taxes, if any, may be deducted by the Custodian under the
provisions of Section 2 of this Agreement).
This Section 5 shall not affect or modify any separate, valid
agreement relating to the allocation of payment of expenses between the
Company, on the one hand, and the Selling Stockholders, on the other hand.
SECTION 6. REIMBURSEMENT OF UNDERWRITERS' EXPENSES.
If this Agreement is terminated by the Representatives pursuant
to Section 4, Section 8, Section 9 or Section 15, or if the sale to the
Underwriters of the Shares on the First Closing Date is not consummated
because of any refusal, inability or failure on the part of the Company or
the Selling Stockholders to perform any agreement herein or to comply with
any provision hereof, the Company agrees to reimburse the Representatives and
the other Underwriters (or such Underwriters as have terminated this
Agreement with respect to themselves), severally, upon demand for all
out-of-pocket expenses that shall have been reasonably incurred by the
Representatives and the Underwriters in connection with the proposed purchase
and the offering and sale of the Shares, including but not limited to fees
and disbursements of counsel, printing expenses, travel and accommodation
expenses, postage, facsimile and telephone charges.
SECTION 7. INDEMNIFICATION AND CONTRIBUTION.
(a) INDEMNIFICATION OF THE UNDERWRITERS.
(1) Indemnification by the Company. The Company
agrees to indemnify and hold harmless each Underwriter, its officers and
employees, and each person, if any, who controls any Underwriter within the
meaning of the Securities Act and the Exchange Act against any loss, claim,
damage, liability or expense, as incurred, to which such Underwriter or such
controlling person may become subject, under the Securities Act, the Exchange
Act or other federal or state statutory law or regulation, or at common law
or otherwise (including in settlement of any litigation, if such settlement
is effected with the written consent of the Company, which consent shall not
be unreasonably withheld), insofar as such loss, claim, damage, liability or
expense (or actions in respect thereof as contemplated below) arises out of
or is based (i) upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, or any amendment
thereto, including any information deemed to be a part thereof pursuant to
Rule 430A under the Securities Act, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading; or (ii) upon any untrue statement
or alleged untrue statement of a material fact contained in any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; or (iii) in whole or in part upon any
inaccuracy in the representations and warranties of the Company or the
Selling Stockholders contained herein; or (iv) in whole or in part upon any
failure of the Company or the Selling Stockholders to perform their
respective
26
obligations hereunder or under law; or (v) any untrue statement or alleged
untrue statement of any material fact contained in any audio or visual
materials provided by the Company or based upon written information furnished
by or on behalf of the Company including, without limitation, slides, videos,
films or tape recordings, used in connection with the marketing of the
Shares, and including, without limitation, statements communicated to
securities analysts employed by the Underwriters; or (vi) any act or failure
to act or any alleged act or failure to act by any Underwriter in connection
with, or relating in any manner to, the Shares or the offering contemplated
hereby, and which is included as part of or referred to in any loss, claim,
damage, liability or action arising out of or based upon any matter covered
by clause (i), (ii), (iii) (iv) or (v) above, PROVIDED that the Company and
the Selling Stockholders shall not be liable under this clause (vi) to the
extent that a court of competent jurisdiction shall have determined by a
final judgment that such loss, claim, damage, liability or action resulted
directly from any such acts or failures to act undertaken or omitted to be
taken by such Underwriter through its bad faith or willful misconduct; and to
reimburse each Underwriter and each such controlling person for any and all
expenses (including the fees and disbursements of counsel chosen by ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇) as such expenses are reasonably incurred by such Underwriter or
such controlling person in connection with investigating, defending,
settling, compromising or paying any such loss, claim, damage, liability,
expense or action; PROVIDED, HOWEVER, that the foregoing indemnity agreement
shall not apply to any loss, claim, damage, liability or expense to the
extent, but only to the extent, that such loss, claim, damage, liability or
expense arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in reliance upon and in
conformity with written information furnished to the Company and the Selling
Stockholders by the Representatives expressly for use in the Registration
Statement, any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto); and PROVIDED, FURTHER, that with respect to any
preliminary prospectus, the foregoing indemnity agreement shall not inure to
the benefit of any Underwriter from whom the person asserting any loss,
claim, damage, liability or expense purchased Shares, or any person
controlling such Underwriter, if copies of the Prospectus were timely
delivered to the Underwriter pursuant to Section 2 and a copy of the
Prospectus (as then amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) was not sent or given by or
on behalf of such Underwriter to such person, if required by law so to have
been delivered, and if the Prospectus (as so amended or supplemented) would
have cured the defect giving rise to such loss, claim, damage, liability or
expense. The indemnity agreement set forth in this Section 7(a) shall be in
addition to any liabilities that the Company and the Selling Stockholders may
otherwise have.
(2) Indemnification by the Selling Stockholders.
Each of the Selling Stockholders, jointly and severally, agrees to indemnify
and hold harmless each Underwriter, its officers and employees, and each
person, if any, who controls any Underwriter within the meaning of the
Securities Act and the Exchange Act against any loss, claim, damage,
liability or expense, as incurred, to which such Underwriter or such
controlling person may become subject, under the Securities Act, the Exchange
Act or other federal or state statutory law or regulation, or at common law
or otherwise (including in settlement of any litigation, if such settlement
is effected with the written consent of the Company, which consent shall not
be unreasonably withheld), insofar as such loss, claim, damage, liability or
expense (or actions in respect thereof as
27
contemplated below) arises out of or is based (i) upon any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement, or any amendment thereto, including any information deemed to be a
part thereof pursuant to Rule 430A under the Securities Act, or the omission
or alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading; or (ii)
upon any untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus or the Prospectus (or any amendment
or supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading, in the case
of subparagraphs (i) and (ii) of this Section 7(a)(2) 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 or such Underwriter by such
Selling Stockholder, directly or through such Selling Stockholder's
representatives, specifically for use in the preparation thereof; or (iii) in
whole or in part upon any inaccuracy in the representations and warranties of
such Selling Stockholder contained herein; or (iv) in whole or in part upon
any failure of such Selling Stockholder to perform their respective
obligations hereunder or under law; or (v) any act or failure to act or any
alleged act or failure to act by any Underwriter in connection with, or
relating in any manner to, the Shares or the offering contemplated hereby,
and which is included as part of or referred to in any loss, claim, damage,
liability or action arising out of or based upon any matter covered by clause
(i), (ii), (iii) or (iv) above, provided that such Selling Stockholder shall
not be liable under this clause (v) to the extent that a court of competent
jurisdiction shall have determined by a final judgment that such loss, claim,
damage, liability or action resulted directly from any such acts or failures
to act undertaken or omitted to be taken by such Underwriter through its bad
faith or willful misconduct; and to reimburse each Underwriter and each such
controlling person for any and all expenses (including the fees and
disbursements of counsel chosen by ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇) as such expenses are
reasonably incurred by such Underwriter or such controlling person in
connection with investigating, defending, settling, compromising or paying
any such loss, claim, damage, liability, expense or action; PROVIDED,
HOWEVER, that the foregoing indemnity agreement shall not apply to any loss,
claim, damage, liability or expense to the extent, but only to the extent,
that such loss, claim, damage, liability or expense arises out of or is based
upon any untrue statement or alleged untrue statement or omission or alleged
omission made in reliance upon and in conformity with written information
furnished to such Selling Stockholder by the Representatives expressly for
use in the Registration Statement, any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto); and PROVIDED, FURTHER,
that with respect to any preliminary prospectus, the foregoing indemnity
agreement shall not inure to the benefit of any Underwriter from whom the
person asserting any loss, claim, damage, liability or expense purchased
Shares, or any person controlling such Underwriter, if copies of the
Prospectus were timely delivered to the Underwriter pursuant to Section 2 and
a copy of the Prospectus (as then amended or supplemented if the Company
shall have furnished any amendments or supplements thereto) was not sent or
given by or on behalf of such Underwriter to such person, if required by law
so to have been delivered, and if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such loss, claim,
damage, liability or expense. The indemnity agreement set forth in this
Section 7(a) shall be in addition to any liabilities that the Selling
Stockholders may otherwise have.
28
(b) INDEMNIFICATION OF THE COMPANY, ITS DIRECTORS AND OFFICERS AND
SELLING STOCKHOLDERS. Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, each of its directors, each of its
officers who signed the Registration Statement, the Selling Stockholders and
each person, if any, who controls the Company or any Selling Stockholder
within the meaning of the Securities Act or the Exchange Act, against any
loss, claim, damage, liability or expense, as incurred, to which the Company,
or any such director, officer, Selling Stockholder or controlling person may
become subject, under the Securities Act, the Exchange Act, or other federal
or state statutory law or regulation, or at common law or otherwise
(including in settlement of any litigation, if such settlement is effected
with the written consent of such Underwriter), insofar as such loss, claim,
damage, liability or expense (or actions in respect thereof as contemplated
below) arises out of or is based upon any untrue or alleged untrue statement
of a material fact contained in the Registration Statement, any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto), or
arises out of or is based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but only
to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in the Registration Statement, any
preliminary prospectus, the Prospectus (or any amendment or supplement
thereto), in reliance upon and in conformity with written information
furnished to the Company and the Selling Stockholders by the Representatives
expressly for use therein; and to reimburse the Company, or any such
director, officer, Selling Stockholder or controlling person for any legal
and other expense reasonably incurred by the Company, or any such director,
officer, Selling Stockholder or controlling person in connection with
investigating, defending, settling, compromising or paying any such loss,
claim, damage, liability, expense or action. The indemnity agreement set
forth in this Section 7(b) shall be in addition to any liabilities that each
Underwriter may otherwise have.
INFORMATION PROVIDED BY THE UNDERWRITERS. Each of the Company
and each of the Selling Stockholders, and each person, if any, who controls
the Company within the meaning of the Securities Act or the Exchange Act,
hereby acknowledges that the only information that the Underwriters have
furnished to the Company expressly for use in the Registration Statement, any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) are the statements set forth in the Prospectus under the caption
"Underwriting" as follows: (i) in the table in the first paragraph, (ii) in
the first, second and third sentences of the subsection titled "Dealers'
Compensation," and (iii) in the second paragraph of the subsection titled
"Online activities"; and the Underwriters confirm that such statements are
correct.
(c) NOTIFICATIONS AND OTHER INDEMNIFICATION PROCEDURES. Promptly
after receipt by an indemnified party under this Section 7 of notice of the
commencement of any action, such indemnified party will, if a claim in
respect thereof is to be made against an indemnifying party under this
Section 7, notify the indemnifying party in writing of the commencement
thereof, but the omission so to notify the indemnifying party will not
relieve it from any liability which it may have to any indemnified party for
contribution or otherwise than under the indemnity agreement contained in
this Section 7 or to the extent it is not prejudiced as a proximate result of
such failure. In case any such action is brought against any indemnified
party and such indemnified party seeks or intends to
29
seek indemnity from an indemnifying party, the indemnifying party will be
entitled to participate in, and, to the extent that it shall elect, jointly
with all other indemnifying parties similarly notified, by written notice
delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof with
counsel reasonably satisfactory to such indemnified party; PROVIDED, HOWEVER,
if the defendants in any such action include both the indemnified party and
the indemnifying party and the indemnified party shall have reasonably
concluded that a conflict may arise between the positions of the indemnifying
party and the indemnified party in conducting the defense of any such action
or that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party
or parties. Upon receipt of notice from the indemnifying party to such
indemnified party of such indemnifying party's election so to assume the
defense of such action and approval by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party under this
Section 7 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence (it being understood, however, that
the indemnifying party shall not be liable for the expenses of more than one
separate counsel (together with local counsel), approved by the indemnifying
party (▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ in the case of Section 7(b) and Section 8),
representing the indemnified parties who are parties to such action), (ii)
the indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of commencement of the action, or (iii) the indemnifying party
has authorized the employment of counsel for the indemnified party at the
expense of the indemnifying party, in each of which cases the fees and
expenses of counsel shall be at the expense of the indemnifying party.
(d) SETTLEMENTS. The indemnifying party under this Section 7 shall
not be liable for any settlement of any proceeding effected without its
written consent, which consent shall not be unreasonably withheld, but if
settled with such consent or if there be a final judgment for the plaintiff,
the indemnifying party agrees to indemnify the indemnified party against any
loss, claim, damage, liability or expense by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by Section
7(d) hereof, the indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 60 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement, compromise or consent to the entry of judgment in any pending or
threatened action, suit or proceeding in respect of which any indemnified
party is or could have been a party and indemnity was or could have been
sought hereunder by such indemnified party, unless such settlement,
compromise or consent includes (i) an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
30
such action, suit or proceeding 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
any indemnified party.
(e) CONTRIBUTION. If the indemnification provided for in this
Section 7 is unavailable to or insufficient to hold harmless an indemnified
party under Section 7(a) or (b) above in respect of any losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) then
each indemnifying party shall contribute to the aggregate amount paid or
payable by such indemnified party in such proportion as is appropriate to
reflect the relative benefits received by the Company or the Selling
Stockholder, as applicable, on the one hand and the Underwriters on the other
from the offering of the Shares. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only
such relative benefits but also the relative fault of the Company or the
Selling Stockholder, as applicable, 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, (or actions or proceedings in
respect thereof), as well as any other relevant equitable considerations. The
relative benefits received by the Company or the Selling Stockholder, as
applicable, on the one hand, and the Underwriters on the other shall be
deemed to be in the same proportion as the total net proceeds (before
deducting expenses) received by the Company or the Selling Stockholder, as
applicable, from the sale of the Shares sold by it in the offering bears to
the total underwriting discounts and commissions received by the Underwriters
in connection with the sale of such Shares, in each case as described in the
Prospectus. 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 and the Selling Stockholders on the one
hand or the Underwriters on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company, each Selling Stockholder and the Underwriters
agree that it would not be just and equitable if contributions pursuant to
this Section 7(f) were determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable
considerations referred to above in this Section 7(f). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to above
in this Section 7(f) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (f), (i) no Underwriter shall be required to
contribute any amount in excess of the underwriting discounts and commissions
applicable to the Shares purchased by such Underwriter and (ii) no person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of the Securities Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations in this Section 7(f) to contribute are several in proportion to
their respective underwriting obligations and not joint.
31
(f) TIMING OF ANY PAYMENTS OF INDEMNIFICATION. Any losses, claims,
damages, liabilities or expenses for which an indemnified party is entitled
to indemnification or contribution under this Section 7 shall be paid by the
indemnifying party to the indemnified party as such losses, claims, damages,
liabilities or expenses are incurred, but in all cases, no later than
forty-five (45) days of invoice to the indemnifying party.
(g) SURVIVAL. The indemnity and contribution agreements contained
in this Section 7 and the representation and warranties set forth in this
Agreement shall remain operative and in full force and effect, regardless of
(i) any investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter, the Company, its directors or officers, any
Selling Stockholder or any persons controlling the Company, (ii) acceptance
of any Shares and payment therefor hereunder, and (iii) any termination of
this Agreement. A successor to any Underwriter, or to the Company, its
directors or officers, any Selling Stockholder or any person controlling the
Company, shall be entitled to the benefits of the indemnity, contribution and
reimbursement agreements contained in this Section 7.
(h) ACKNOWLEDGEMENTS OF PARTIES. The parties to this Agreement
hereby acknowledge that they are sophisticated business persons who were
represented by counsel during the negotiations regarding the provisions
hereof including, without limitation, the provisions of this Section 7, and
are fully informed regarding said provisions. They further acknowledge that
the provisions of this Section 7 fairly allocate the risks in light of the
ability of the parties to investigate the Company and its business in order
to assure that adequate disclosure is made in the Registration Statement and
Prospectus as required by the Securities Act and the Exchange Act.
SECTION 8. DEFAULT OF ONE OR MORE OF THE SEVERAL UNDERWRITERS.
If, on the First Closing Date or the Second Closing Date, as
the case may be, any one or more of the several Underwriters shall fail or
refuse to purchase Shares that it or they have agreed to purchase hereunder
on such date, and the aggregate number of Common Shares which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase does not
exceed 10% of the aggregate number of the Shares to be purchased on such
date, the other Underwriters shall be obligated, severally, in the
proportions that the number of Firm Common Shares set forth opposite their
respective names on SCHEDULE A bears to the aggregate number of Firm Shares
set forth opposite the names of all such non-defaulting Underwriters, or in
such other proportions as may be specified by the Representatives with the
consent of the non-defaulting Underwriters, to purchase the Shares which such
defaulting Underwriter or Underwriters agreed but failed or refused to
purchase on such date. If, on the First Closing Date or the Second Closing
Date, as the case may be, any one or more of the Underwriters shall fail or
refuse to purchase Shares and the aggregate number of Shares with respect to
which such default occurs exceeds 10% of the aggregate number of Shares to be
purchased on such date, and arrangements satisfactory to the Representatives
and the Company for the purchase of such Shares are not made within 48 hours
after such default, this Agreement shall terminate without liability of any
party to any other party except that the provisions of Section 5, and
Section 7 shall at all times be effective and shall survive such termination.
In any such case either the Representatives
32
or the Company shall have the right to postpone the First Closing Date or the
Second Closing Date, as the case may be, but in no event for longer than
seven days in order that the required changes, if any, to the Registration
Statement and the Prospectus or any other documents or arrangements may be
effected.
As used in this Agreement, the term "Underwriter" shall be
deemed to include any person substituted for a defaulting Underwriter under
this Section 8. Any action taken under this Section 8 shall not relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
SECTION 9. TERMINATION OF THIS AGREEMENT.
This Agreement may be terminated by the Representatives by
notice given to the Company and the Selling Stockholders if (a) at any time
after the execution and delivery of this Agreement and prior to the First
Closing Date (i) trading or quotation in any of the Company's securities
shall have been suspended or limited by the Commission or by the Nasdaq, or
trading in securities generally on either the Nasdaq Stock Market or the New
York Stock Exchange shall have been suspended or limited, or minimum or
maximum prices shall have been generally established on any of such stock
exchanges by the Commission or the NASD; (ii) a general banking moratorium
shall have been declared by any of federal, New York, Delaware or California
authorities; (iii) there shall have occurred any outbreak or escalation of
national or international hostilities or any crisis or calamity, or any
change in the United States or international financial markets, or any
substantial change or development involving a prospective change in United
States' or international political, financial or economic conditions, as in
the judgment of the Representatives is material and adverse and makes it
impracticable or inadvisable to market the Common Shares in the manner and on
the terms contemplated in the Prospectus or to enforce contracts for the sale
of securities; (iv) in the judgment of the Representatives there shall have
occurred any Material Adverse Change; or (v) the Company shall have sustained
a loss by strike, fire, flood, earthquake, accident or other calamity of such
character as in the judgment of the Representatives may interfere materially
with the conduct of the business and operations of the Company regardless of
whether or not such loss shall have been insured; or (b) in the case of any
of the events specified 9(a)(i)-(v), such event singly or together with any
other event, makes it, in your judgment, impracticable or inadvisable to
market the Common Shares in the manner and on the terms contemplated in the
Prospectus. Any termination pursuant to this Section 9 shall be without
liability on the part of (x) the Company or the Selling Stockholders to any
Underwriter, except that the Company and the Selling Stockholders shall be
obligated to reimburse the expenses of the Representatives and the
Underwriters pursuant to Sections 5 and 6 hereof, (y) any Underwriter to the
Company or any person controlling the Company or the Selling Stockholders, or
(z) of any party hereto to any other party except that the provisions of
Section 7 shall at all times be effective and shall survive such termination.
SECTION 10. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY.
The respective indemnities, agreements, representations,
warranties and other statements of the Company or any person controlling the
company, of its officers,
33
of the Selling Stockholders 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 made by or on behalf of any Underwriter or
the Company or any of its or their partners, officers or directors or any
controlling person, or any Selling Stockholder, as the case may be, and will
survive delivery of and payment for the Shares sold hereunder and any
termination of this Agreement.
SECTION 11. NOTICES.
All communications hereunder shall be in writing and shall be
mailed, hand delivered or telecopied and confirmed to the parties hereto as
follows:
If to the Representatives:
FleetBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
with a copy to:
O'Melveny & ▇▇▇▇▇ LLP
Embarcadero Center West
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
If to the Company:
Elantec Semiconductor, Inc
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇, Vice President of Finance and
Administration and Chief Financial Officer
If to the Selling Stockholders, to its address as shown in SCHEDULE B, with a
copy to:
Fenwick & West LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇, Esq.
And, during the term of the Custody Agreement, with a copy to:
34
[Custodian] [TO BE PROVIDED BY FENWICK & WEST]
[address]
Facsimile:
Attn:
Any party hereto may change the address for receipt of communications by
giving written notice to the others.
SECTION 12. SUCCESSORS.
This Agreement will inure to the benefit of and be binding upon
the parties hereto, including any substitute Underwriters pursuant to Section
9 hereof, and to the benefit of the employees, officers and directors and
controlling persons referred to in Section 7, and to their respective
successors, and personal representatives, and no other person will have any
right or obligation hereunder. The term "successors" shall not include any
purchaser of the Shares as such from any of the Underwriters merely by reason
of such purchase.
SECTION 13. PARTIAL UNENFORCEABILITY.
The invalidity or unenforceability of any Section, paragraph or
provision of this Agreement shall not affect the validity or enforceability
of any other Section, paragraph or provision hereof. If any Section,
paragraph or provision of this Agreement is for any reason determined to be
invalid or unenforceable, there shall be deemed to be made such minor changes
(and only such minor changes) as are necessary to make it valid and
enforceable.
SECTION 14. GOVERNING LAW PROVISIONS.
(a) GOVERNING LAW. This agreement shall be governed by and
construed in accordance with the internal laws of the state of New York
applicable to agreements made and to be performed in such state.
(b) CONSENT TO JURISDICTION. Any legal suit, action or proceeding
arising out of or based upon this Agreement or the transactions contemplated
hereby ("Related Proceedings") may be instituted in the federal courts of the
United States of America located in the City and County of San Francisco or
the courts of the State of California in each case located in the City and
County of San Francisco (collectively, the "Specified Courts"), and each
party irrevocably submits to the exclusive jurisdiction (except for
proceedings instituted in regard to the enforcement of a judgment of any such
court (a "Related Judgment"), as to which such jurisdiction is non-exclusive)
of such courts in any such suit, action or proceeding. Service of any
process, summons, notice or document by mail to such party's address set
forth above shall be effective service of process for any suit, action or
other proceeding brought in any such court. The parties irrevocably and
unconditionally waive any objection to the laying of venue of any suit,
action or other proceeding in the Specified Courts and irrevocably and
unconditionally waive and agree not to plead or claim in any such court that
any such suit, action or other proceeding brought in any such court has been
brought in an inconvenient forum. Each party not
35
located in the United States irrevocably appoints CT Corporation System,
which currently maintains a San Francisco office at ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ of America, as its agent to
receive service of process or other legal summons for purposes of any such
suit, action or proceeding that may be instituted in any state or federal
court in the City and County of San Francisco.
SECTION 15. FAILURE OF ONE OR MORE OF THE SELLING STOCKHOLDERS TO SELL
AND DELIVER COMMON SHARES.
If one or more of the Selling Stockholders shall fail to sell
and deliver to the Underwriters the Shares to be sold and delivered by such
Selling Stockholders at the First Closing Date pursuant to this Agreement,
then the Underwriters may at their option, by written notice from the
Representatives to the Company and the Selling Stockholders, either (i)
terminate this Agreement without any liability on the part of any Underwriter
or, except as provided in Sections 5, 6, and 7 hereof, the Company or the
Selling Stockholders, or (ii) purchase the shares which the Company and
Selling Stockholders have agreed to sell and deliver in accordance with the
terms hereof. If one or more of the Selling Stockholders shall fail to sell
and deliver to the Underwriters the Shares to be sold and delivered by such
Selling Stockholders pursuant to this Agreement at the First Closing Date or
the Second Closing Date, then the Underwriters shall have the right, by
written notice from the Representatives to the Company and the Selling
Stockholders, to postpone the First Closing Date or the Second Closing Date,
as the case may be, but in no event for longer than seven days in order that
the required changes, if any, to the Registration Statement and the
Prospectus or any other documents or arrangements may be effected.
SECTION 16. GENERAL PROVISIONS.
This Agreement constitutes the entire agreement of the parties
to this Agreement and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings and negotiations with respect
to the subject matter hereof. This Agreement may be executed in two or more
counterparts, each one of which shall be an original, with the same effect as
if the signatures thereto and hereto were upon the same instrument. This
Agreement may not be amended or modified unless in writing by all of the
parties hereto, and no condition herein (express or implied) may be waived
unless waived in writing by each party whom the condition is meant to
benefit. Section headings herein are for the convenience of the parties only
and shall not affect the construction or interpretation of this Agreement.
The remainder of this page has been intentionally left blank.
36
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the Company and the Custodian
the enclosed copies hereof, whereupon this instrument, along with all
counterparts hereof, shall become a binding agreement in accordance
with its terms.
Very truly yours,
ELANTEC SEMICONDUCTOR, INC.
By:
---------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇
Vice President of Finance and
Administration and
Chief Financial Officer
EACH AND EVERY SELLING STOCKHOLDER
By:
----------------------------------------
ATTORNEY-IN-FACT FOR THE SELLING
STOCKHOLDERS NAMED
IN SCHEDULE B HERETO
The foregoing Underwriting Agreement is hereby confirmed and accepted by the
Representatives as of the date first above written.
FLEETBOSTON ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ INC.
BANC OF AMERICA SECURITIES LLC
▇▇▇▇▇▇ ▇▇▇▇▇▇ PARTNERS LLC
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, INC.
On their behalf and on behalf of each of the several underwriters named in
SCHEDULE A hereto.
BY: FLEETBOSTON ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ INC.
By: __________________________________
AUTHORIZED SIGNATORY
S-1
SCHEDULE A
Number of
Firm Shares
To be
Underwriters Purchased
---------------------------------------------------------------------------------------- -------------------
FleetBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc. .................................................. [___]
Banc of America Securites LLC ........................................................ [___]
▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC............................................................ [___]
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc. ......................................................... [___]
---------------------------------------------------------------------------------------- -------------------
Total........................................................................ 1,600,000
===================
Schedule A
SCHEDULE B
Number of
Firm Shares
Selling Stockholders to be Sold
----------------------------------------------------------- -----------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇.
[address]
Attention: [FENWICK & WEST TO PROVIDE] ................... 20,000
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
[address]
Attention: [FENWICK & WEST TO PROVIDE] ................... 20,000
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
[address]
Attention: [FENWICK & WEST TO PROVIDE] ................... 15,000
▇▇▇▇ ▇▇▇▇▇
[address]
Attention: [FENWICK & WEST TO PROVIDE] ................... 25,000
----------------------------------------------------------- -----------------------
Total............................................ 80,000
=======================
Schedule B
SCHEDULE C
1. Elantec Semiconductor UK Limited
2. Elantec Semiconductor International Ltd.
3. Elantec Semiconductor Japan Kabushiki Kaisha
Schedule C
EXHIBIT A
LOCK-UP AGREEMENT
August 11, 2000
FleetBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC
Banc of America Securities LLC
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc.
c/o FleetBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
RE: ELANTEC SEMICONDUCTOR, INC.
Ladies and Gentlemen:
The undersigned is an owner of record or beneficially of certain
shares of common stock ("Common Stock") of Elantec Semiconductor, Inc., a
Delaware corporation (the "Company"), or securities convertible into or
exchangeable or exercisable for Common Stock. The Company proposes to carry
out a public offering of Common Stock (the "Offering") for which you will act
as the Representatives (the "Representatives") of the underwriters. The
undersigned recognizes that the Offering will be of benefit to the
undersigned and will benefit the Company by, among other things, raising
additional capital for its operations. The undersigned acknowledges that you
and the other underwriters are relying on the representations and agreements
of the undersigned contained in this letter in carrying out the Offering and
in entering into underwriting arrangements with the Company with respect to
the Offering.
In consideration of the foregoing, the undersigned hereby agrees
that the undersigned will not offer to sell, contract to sell, or otherwise
sell, dispose of, loan, pledge or grant any rights with respect to
(collectively, a "Disposition") any shares of Common Stock, any options or
warrants to purchase any shares of Common Stock or any securities convertible
into or exchangeable for shares of Common Stock (collectively, "Securities")
now owned or hereafter acquired directly by such person or with respect to
which such person has or hereafter acquires the power of disposition,
otherwise than (i) as a bona fide gift or gifts, provided the donee or donees
thereof agree in writing to be bound by this restriction, (ii) as a
distribution to partners or shareholders of such person, provided that the
distributees thereof agree in writing to be bound by the terms of this
restriction, (iii) with respect to sales or purchases of Common Stock
acquired on the open market after the date of this Agreement or (iv) with the
prior written consent of FleetBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc. The foregoing
restrictions will terminate on the close of trading of the Common Stock on
the 90th day after (and including) the day the
A-1
Common Stock sold in the Offering commenced trading on the Nasdaq National
Market (the "Lock-Up" Period). The foregoing restriction has been expressly
agreed to preclude the holder of the Securities from engaging in any hedging
or other transaction which is designed to or reasonably expected to lead to
or result in a Disposition of Securities during the Lock-up Period, even if
such Securities would be disposed of by someone other than such holder. Such
prohibited hedging or other transactions would include, without limitation,
any short sale (whether or not against the box) or any purchase, sale or
grant of any right (including, without limitation, any put or call option)
with respect to any Securities or with respect to any security (other than a
broad-based market basket or index) that included, relates to or derives any
significant part of its value from Securities. The undersigned also agrees
and consents to the entry of stop transfer instructions with the Company's
transfer agent and registrar against the transfer of shares of Common Stock
or Securities held by the undersigned except in compliance with the foregoing
restrictions.
With respect to the Offering only, the undersigned waives any
registration rights relating to registration under the Securities Act of 1933,
as amended, of any Common Stock or other Securities owned either of record or
beneficially by the undersigned, including any rights to receive notice of the
Offering.
This agreement is irrevocable and will be binding on the undersigned
and the respective successors, heirs, personal representatives, and assigns
of the undersigned. In the event the Offering has not occurred on or before
November 25, 2000, this Lock-Up Agreement shall be of no further force or
effect.
Dated:
----------------------------------------
----------------------------------------------
Printed Name of Holder
By:
-------------------------------------------
Signature
----------------------------------------------
Printed Name of Person Signing
(and indicate capacity of person signing if
signing as custodian, trustee, or on behalf
of an entity)
A-2
EXHIBIT B
MATTERS TO BE COVERED IN THE OPINION OF COMPANY COUNSEL
(i) The Company and each of its subsidiaries (each, a
"Subsidiary") has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the jurisdiction of
its incorporation;
(ii) The Company and each Subsidiary has the corporate
power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus;
(iii) The Company and each Subsidiary is duly qualified to
do business as a foreign corporation and is in good standing in each
jurisdiction, if any, in which the ownership or leasing of its
properties or the conduct of its business requires such
qualification, except where the failure to be so qualified or be in
good standing would not have a Material Adverse Effect. To such
counsel's knowledge, the Company does not own or control, directly
or indirectly, any corporation, association or other entity other
than [LIST SUBSIDIARIES];
(iv) The authorized, issued and outstanding capital stock
of the Company is as set forth in the Prospectus under the caption
"Capitalization" as of the dates stated therein, the issued and
outstanding shares of capital stock of the Company (including the
Shares offered by the Selling Stockholders) outstanding prior to the
issuance of the Shares have been duly and validly issued and are
fully paid and nonassessable, and will not have been issued in
violation of or subject to any preemptive right arising under the
certificate of incorporation or Delaware General Corporation Law,
or, to such counsel's knowledge, any co-sale right, right of first
refusal or other similar right, other than any registration rights
described in Opinion (xix) hereof;
(v) All issued and outstanding shares of capital stock of
each Subsidiary of the Company have been duly authorized and validly
issued and are fully paid and nonassessable, and have not been
issued in violation of or subject to any preemptive right arising
under the certificate of incorporation or Delaware General
Corporation Law, or, to such counsel's knowledge, any co-sale right,
right of first refusal or other similar right, and are owned by the
Company free and clear of any pledge, lien, security interest,
encumbrance, claim or equitable interest;
(vi) The Firm Shares or the Option Shares, as the case may
be, to be issued by the Company pursuant to the terms of this
Agreement have been duly authorized and, upon issuance and delivery
against payment therefor in accordance with the terms hereof, will
be duly and validly issued and fully paid and nonassessable, and
will not have been issued in violation of or subject to any
preemptive right arising under the certificate of incorporation or
Delaware General Corporation Law, or, any co-sale right, right of
first refusal or other similar right;
B-1
(vii) The Company has the corporate power and authority to
enter into this Agreement and to issue, sell and deliver to the
Underwriters the Shares to be issued and sold by it hereunder;
(viii) This Agreement has been duly authorized by all
necessary corporate action on the part of the Company and has been
duly executed and delivered by the Company and, assuming due
authorization, execution and delivery by you, is a valid and binding
agreement of the Company, enforceable in accordance with its terms,
except as rights to indemnification hereunder may be limited by
applicable law and except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or affecting creditors' rights generally or by general
equitable principles (whether relief is sought in a proceeding at
law or in equity);
(ix) The Registration Statement has become effective
under the Securities Act and the Shares have been validly registered
under the Securities Act and the applicable rules and regulations of
the Commission thereunder and, to such counsel's knowledge, no stop
order suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose have been instituted
or are pending or threatened under the Securities Act;
(x) The 8-A Registration Statement complied as to form
in all material respects with the requirements of the Exchange Act;
the 8-A Registration Statement has become effective under the
Exchange Act; the Common Shares have been validly registered under
the Exchange Act and the applicable rules and regulations of the
Commission thereunder and, to such counsel's knowledge, no stop
order suspending the effectiveness of the Form 8-A Registration
Statement has been issued and no proceedings for that purpose have
been instituted or are pending or threatened under the Exchange Act;
(xi) The Registration Statement and the Prospectus, and
each amendment or supplement thereto (other than the financial
statements (including supporting schedules) and financial data
derived therefrom as to which such counsel need express no opinion),
as of the effective date of the Registration Statement, complied as
to form in all material respects with the requirements of the
Securities Act and the applicable Rules and Regulations; and each of
the Incorporated Documents (other than the financial statements
(including supporting schedules) and the financial data derived
therefrom as to which such counsel need express no opinion) complied
when filed pursuant to the Exchange Act as to form in all material
respects with the requirements of the Exchange Act and the Rules and
Regulations of the Exchange Act and the applicable rules and
regulations of the Commission thereunder;
(xii) The information in the Prospectus under the caption
"Description of Capital Stock" and "Risk Factors--Our failure to
comply with environmental laws and regulations could subject us to
significant fines and liabilities, and new laws and regulations or
changes in regulatory interpretation or enforcement could make
compliance more difficult and costly," "--Provisions of our
certificate of incorporation and bylaws or Delaware law may delay or
prevent a change of control
B-2
of Elantec or changes in our management and therefore, depress the
trading price of our common stock," to the extent that it
constitutes matters of law or legal conclusions, has been reviewed
by such counsel and is a fair summary of such matters and
conclusions; and the forms of certificates evidencing the Common
Stock and filed as exhibits to the Registration Statement comply
with Delaware law;
(xiii) The description in the Registration Statement and
the Prospectus of the charter and bylaws of the Company and of
statutes are accurate and fairly present the information required to
be presented by the Securities Act;
(xiv) To such counsel's knowledge, there are no
agreements, contracts, leases or documents to which the Company is a
party of a character required to be described or referred to in the
Registration Statement or Prospectus or any Incorporated Document or
to be filed as an exhibit to the Registration Statement or any
Incorporated Document which are not described or referred to therein
or filed as required;
(xv) The performance of this Agreement and the
consummation of the transactions herein contemplated (other than
performance of the Company's indemnification obligations hereunder,
concerning which no opinion need be expressed) will not (a) result
in any violation of the Company's charter or bylaws or (b) to such
counsel's knowledge, result in a material breach or violation of any
of the terms and provisions of, or constitute a default under, any
bond, debenture, note or other evidence of indebtedness, or any
lease, contract, indenture, mortgage, deed of trust, loan agreement,
joint venture or other agreement or instrument known to such counsel
to which the Company is a party or by which its properties are
bound, or any applicable statute, rule or regulation known to such
counsel or, to such counsel's knowledge, any order, writ or decree
of any court, government or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries, or over
any of their properties or operations;
(xvi) No consent, approval, authorization or order of or
qualification with any court, government or governmental agency or
body having jurisdiction over the Company or any of its
subsidiaries, or over any of their properties or operations is
necessary in connection with the consummation by the Company of the
transactions herein contemplated, except (i) such as have been
obtained under the Securities Act, (ii) such as may be required
under state or other securities or Blue Sky laws in connection with
the purchase and the distribution of the Shares by the Underwriters,
(iii) such as may be required by the NASD and (iv) such as may be
required under the federal or provincial laws of Canada;
(xvii) To such counsel's knowledge, there are no legal or
governmental proceedings pending or threatened against the Company
or any of its subsidiaries of a character required to be disclosed
in the Registration Statement or the Prospectus or any Incorporated
Document by the Securities Act or by the Exchange Act or the
applicable rules and regulations of the Commission thereunder, other
than those described therein;
B-3
(xviii) To such counsel's knowledge, neither the Company
nor any of its Subsidiaries is presently (a) in material violation
of its respective charter or bylaws, or (b) in material breach of
any applicable statute, rule or regulation known to such counsel or,
to such counsel's knowledge, any order, writ or decree of any court
or governmental agency or body having jurisdiction over the Company
or any of its subsidiaries, or over any of their properties or
operations; and
(xix) To such counsel's knowledge, no holders of Common
Shares or other securities of the Company have registration rights
with respect to securities of the Company.
(xx) The Company is not and, after giving effect to the
offering and the sale of the Shares and the application of the
proceeds thereof as described in the Prospectus, will not be, an
"investment company" as such term is defined in the Investment
Company Act of 1940, as amended.
(xxi) To such counsel's knowledge, the Company and its
subsidiaries own or possess sufficient trademarks, trade names,
patent rights, copyrights, licenses, approvals, trade secrets and
other similar rights (collectively, "Intellectual Property Rights")
reasonably necessary to conduct their business as now conducted; and
the expected expiration of any such Intellectual Property Rights
would not result in a Material Adverse Effect. The Company has not
received any notice of infringement or conflict with asserted
Intellectual Property Rights of others, which infringement or
conflict, if the subject of an unfavorable decision, would result in
a Material Adverse Effect. To such counsel's knowledge, the
Company's discoveries, inventions, products, or processes referred
to in the Registration Statement or Prospectus do not infringe or
conflict with any right or patent which is the subject of a patent
application known to the Company.
(xxii) Each document filed pursuant to the Exchange Act
(other than the financial statements and supporting schedules
included therein, as to which no opinion need be rendered) and
incorporated or deemed to be incorporated by reference in the
Prospectus complied when so filed as to form in all material
respects with the Exchange Act and such counsel has no reason to
believe that any of such documents, when they were so filed,
contained an untrue statement of a material fact or omitted to state
a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made when
such documents were filed, not misleading.
In addition, such counsel shall state that such counsel has
participated in conferences with officials and other representatives of the
Company, the Representatives, Underwriters' Counsel and the independent
certified public accountants of the Company, at which such conferences the
contents of the Registration Statement and Prospectus and related matters
were discussed, and although they have not verified the accuracy or
completeness of the statements contained in the Registration Statement or the
Prospectus, nothing has come to the attention of such counsel which leads
them to believe that, at the time the Registration Statement became effective
and at all times subsequent thereto up to and on the First Closing Date or
Second Closing Date, as the case may be, the
B-4
Registration Statement and any amendment or supplement thereto and any
Incorporated Document, when such documents became effective or were filed
with the Commission (other than the financial statements including supporting
schedules and other financial and statistical information derived therefrom,
as to which such counsel need express no comment) contained any untrue
statement of a material fact or omitted to state a material fact required to
be stated therein or necessary to make the statements therein not misleading,
or at the First Closing Date or the Second Closing Date, as the case may be,
the Registration Statement, the Prospectus and any amendment or supplement
thereto and any Incorporated Document (except as aforesaid) contained any
untrue statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
Such counsel shall also state that the conditions for the use of
Form S-3 set forth in the General Instructions thereto have been satisfied.
B-5
EXHIBIT C
MATTERS TO BE COVERED IN THE OPINION OF
INTELLECTUAL PROPERTY COUNSEL FOR THE COMPANY
August [__], ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.
Banc of America Securities LLC
▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc.
As Representatives of the Several Underwriters
c/o FleetBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
RE: PUBLIC OFFERING OF 1,520,000 SHARES OF COMMON STOCK
OF ELANTEC SEMICONDUCTOR, INC.
Ladies and Gentlemen:
This opinion is furnished to you as representatives (the
"Representatives") of the several Underwriters (defined below) pursuant to
Section [__] of the Underwriting Agreement dated August [__], 2000 (the
"Underwriting Agreement"), by and among Elantec Semiconductor, Inc., a
Delaware corporation (the "Company," which term includes the Company's
subsidiaries for purposes of this opinion), and you, as the Representatives
of the several Underwriters named in SCHEDULE A to the Underwriting Agreement
(the "Underwriters").
We act as intellectual property counsel for the Company and
in such capacity we are familiar with the technology used by the Company in
its business and the manner of its use thereof and have read the registration
statement (SEC file no. 333-43864) as amended though the date hereof (the
"Registration Statement") and the related prospectus (the "Prospectus"),
including particularly the portions of the Registration Statement and the
Prospectus referring to the Company's patents, patent rights or licenses,
trademarks or trademark rights, service marks, copyrights, maskwork rights,
collaborative research, licenses or royalty arrangements or agreements, trade
secrets, know-how or proprietary techniques, including processes and
substances, or other proprietary information or materials (collectively
"Intellectual Property") and in our opinion:
(i) The statements in the Prospectus under the captions
"Risk Factors--If we fail to protect our intellectual property our
competitors could market products with similar features, reducing demand for
our product and harming our
C-1
operating results," "--From time to time we may from time to time be subject
to claims of infringement of other parties' proprietary rights, or claims
that our intellectual property rights are invalid, which could result in
significant expense and loss of intellectual property rights" and
"Business--Patents and Licenses," insofar as such statements constitute
matters of law, legal conclusions or summaries of legal matters relating to
Intellectual Property, or descriptions of the Company's Intellectual Property
portfolio, accurately and fairly present and summarize, in all material
respects, the matters referred to therein.
(ii) The Company is listed in the records of the United
States Patent and Trademark Office (the "USPTO") as the sole holder of record
of (a) each of the patents listed on the attached SCHEDULE A (the "U.S.
Patents") and (b) each of the United States patent applications listed the
attached SCHEDULE B (the "U.S. Applications"). No third party can validly
claim any ownership interest or lien with respect to any U.S. Patent or U.S.
Application. There are no material defects in form in the preparation or
filing of the U.S. Applications. The U.S. Applications are being diligently
pursued by the Company. There are no interference proceedings pending with
respect to any U.S. Patent or U.S. Application.
(iii) The Company is listed in the records of the
appropriate foreign offices as the sole holder of record of (a) each of the
foreign patents listed on the attached SCHEDULE C (the "Foreign Patents") and
(b) each of the foreign patent applications listed on the attached SCHEDULE D
(the "Foreign Applications"). No third party can validly claim any ownership
interest or lien with respect to any Foreign Patent or Foreign Application.
There are no material defects of form in the preparation or filing of the
Foreign Applications. The Foreign Applications are being diligently pursued
by the Company. There are no opposition proceedings pending against any
Foreign Application.
(iv) To our knowledge there is no reason why any of the
U.S. Patents or Foreign Patents are not valid as issued. To our knowledge,
there is no reason why any patent to be issued as a result of any U.S.
Application or Foreign Application would not be valid or would not afford the
Company useful patent protection with respect thereto. To our knowledge, the
Company has complied with all regulations, procedures and policies of the
USPTO, including the duty of candor, in the prosecution of the U.S. Patents
and U.S. Applications. All material prior art of which we are aware has been
disclosed to the USPTO for consideration with respect to the examination of
the U.S. Patents and U.S. Applications.
(v) [Add name of licensor] ("Licensor") is listed in the
records of the USPTO and the appropriate foreign offices as the sole holder
of record of each of the U.S. and foreign patents listed on the attached
SCHEDULE E (the "Licensor Patents") and each of the U.S. and foreign patent
applications listed on the attached SCHEDULE F (the "Licensor Applications").
The Company has a valid and enforceable license to each of the Licensor
Patents and Licensor Applications, which licenses are recorded in all
appropriate patent offices. The terms of the licenses are sufficient to
permit the Company to practice the Licensor Patents and Licensor Applications
as contemplated by the Prospectus.
C-2
(vi) No third party can validly claim any ownership
interest or lien with respect to any Licensor Patent or Licensor Application,
other than the Company to the extent of its license [and describe any other
exceptions with particularity]. There are no material defects of form in the
preparation or filing of the Licensor Applications. The Licensor Applications
are being diligently pursued by the Licensor. There are no interference
proceedings or other opposition proceedings pending with respect to any Licensor
Patent or Licensor Application. To our knowledge there is no reason why any of
the Licensor Patents are not valid as issued. To our knowledge, there is no
reason why any patent to be issued as a result of any Licensor Application would
not be valid or would not afford the Licensor useful patent protection with
respect thereto. To our knowledge, the Licensor has complied with all
regulations, procedures and policies of the USPTO, including the duty of candor,
in the prosecution of the U.S. Licensor Patents and U.S. Licensor Applications.
All material prior art of which we are aware has been disclosed to the USPTO for
consideration with respect to the examination of the U.S. Licensor Patents and
U.S. Licensor Applications.
(vii) The license agreement between Licensor and
[Prior Licensee], dated _____, as amended, has been validly and effectively
terminated and neither [Prior Licensee] nor its successors or assigns retains
any residual rights in any of the Licensor Patents or Licensor Applications.
(viii) To our knowledge, the Company has not infringed, and
is not infringing, any valid patent claims of third parties.
(ix) No action, suit, claim or proceeding relating to or
affecting the Intellectual Property is pending or, to our knowledge,
threatened against the Company, and no party has proposed a license, royalty
or other contractual arrangement in lieu of asserting a potential
infringement claim against the Company, in each case other than as set forth
with particularity on SCHEDULE G.
(x) At present, the Company has not asserted and, to our
knowledge, is not contemplating the assertion of, any claim of infringement
against any third party; and the Company has not proposed and, to our
knowledge, is not contemplating the proposal of, any license, royalty or
other contractual arrangement in lieu of asserting a potential infringement
claim against any third party, in each case other than as set forth with
particularity on SCHEDULE H.
In addition, we have reviewed the full Registration
Statement and Prospectus (including the documents incorporated therein by
reference) and participated in discussions with the Company, Company counsel,
the underwriters and underwriters counsel regarding the disclosure of
Intellectual Property matters therein and, although we are not passing upon
and do not assume any responsibility for the accuracy, completeness or
fairness of any statements contained in the Registration Statement or the
Prospectus (other than as specified above), and any supplements or amendments
thereto, on the basis of the foregoing, nothing has come to our attention
which would lead us to believe, and we do not believe, that either the
Registration Statement (including the documents incorporated therein by
reference) or any amendments thereto, at the time the Registration Statement
or such amendments became effective, contained an untrue statement of a
material fact regarding the Company's Intellectual Property or
C-3
omitted to state a material fact regarding the Company's Intellectual
Property required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus (including the documents
incorporated therein by reference), as of its date or at the date of this
letter, contained an untrue statement of a material fact regarding the
Company's Intellectual Property or omitted to state a material fact regarding
the Company's Intellectual Property necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading (it being understood that we express no belief as to the financial
statements or schedules or other financial or statistical data derived
therefrom, included or incorporated by reference in the Registration
Statement or the Prospectus or any amendments or supplements thereto).
We have delivered to your counsel, O'Melveny & ▇▇▇▇▇ LLP,
copies of all opinions and audit letter responses that we delivered at the
Company's request to the Company, its auditors or any other parties with
respect to any litigation or threatened litigation we are defending or
prosecuting for the Company with respect to its Intellectual Property.
Sincerely,
Fliesler, Dubb, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
[Please supply draft schedules together with drafts of the opinion]
C-4
EXHIBIT D
MATTERS TO BE COVERED IN THE OPINION OF SELLING STOCKHOLDER COUNSEL
(i) The Underwriting Agreement has been duly authorized,
executed and delivered by or on behalf of, and assuming due
authorization, execution and delivery by you, is a valid and binding
agreement of, such Selling Stockholder, enforceable in accordance
with its terms, except as rights to indemnification thereunder may
be limited by applicable law and except as the enforcement thereof
may be limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws relating to or affecting creditors' rights
generally or by general equitable principles.
(ii) The execution and delivery by such Selling
Stockholder of, and the performance by such Selling Stockholder of
its obligations under, the Underwriting Agreement and its Custody
Agreement and its Power of Attorney will not contravene or conflict
with, result in a breach of, or constitute a default under, the
charter or by-laws, partnership agreement, trust agreement or other
organization documents, as the case may be, of such Selling
Stockholder, or, to the best of such counsel's knowledge, violate,
result in a breach of or constitute a default under the terms of any
other agreement or instrument to which such Selling Stockholder is a
party or by which it is bound, or any judgment, order or decree
applicable to such Selling Stockholder of any court, regulatory
body, administrative agency, governmental body or arbitrator having
jurisdiction over such Selling Stockholder.
(iii) Such Selling Stockholder has good and valid title to
all of the Common Shares which may be sold by such Selling
Stockholder under the Underwriting Agreement and has the legal right
and power, and all authorization and approvals required to enter into
the Underwriting Agreement and its Custody Agreement and its Power of
Attorney, to sell, transfer and deliver all of the Common Shares
which may be sold by such selling Stockholder under the Underwriting
Agreement and to comply with its other obligations under the
Underwriting Agreement, its Custody Agreement and its Power of
Attorney.
(iv) Each of the Custody Agreement and Power of Attorney
of such Selling Stockholder has been duly authorized, executed and
delivered by such Selling Stockholder and is a valid and binding
agreement of such Selling Stockholder, enforceable in accordance
with its terms, except as rights to indemnification thereunder may
be limited by applicable law and except as the enforcement thereof
may be limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws relating to or affecting creditors' rights
generally or by general equitable principles.
(v) Assuming that the Underwriters purchase the Shares
which are sold by such Selling Stockholder pursuant to the
Underwriting Agreement for value, in good faith and without notice
of any adverse claims, the delivery of such Shares pursuant to the
Underwriting Agreement will pass good and valid title to
D-1
such Shares, free and clear of any security interest, mortgage,
pledge, lieu encumbrance or other claim.
(vi) To the best of such counsel's knowledge, no consent,
approval, authorization or other order of, or registration or filing
with, any court or governmental authority or agency, is required for
the consummation by such Selling Stockholder of the transactions
contemplated in the Underwriting Agreement, except as required under
the Securities Act, applicable state securities or blue sky laws,
and from the NASD.
D-2