BANC OF AMERICA SECURITIES LLC
____________ Shares
Therma-Wave, Inc.
Common Stock
Underwriting Agreement
dated ____________ __, 1999
Table of Contents
Section 1. Representations and Warranties of the Company...................... 2
(a) Compliance with Registration Requirements.......................... 2
(b) Offering Materials Furnished to Underwriters....................... 3
(c) Distribution of Offering Material By the Company................... 4
(d) The Underwriting Agreement......................................... 4
(e) Authorization of the Common Shares................................. 4
(f) No Applicable Registration or Other Similar Rights................. 4
(g) No Material Adverse Change......................................... 4
(h) Independent Accountants............................................ 5
(i) Preparation of the Financial Statements............................ 5
(j) Incorporation and Good Standing of the Company and its Subsidiaries 5
(k) Capitalization and Other Capital Stock Matters..................... 6
(l) Nasdaq National Market Quotation................................... 6
(m) Non-Contravention of Existing Instruments;
No Further Authorizations or Approvals Required.................... 6
(n) Compliance with Laws............................................... 7
(o) No Material Actions or Proceedings................................. 7
(p) Intellectual Property Rights....................................... 8
(q) All Necessary Permits, etc......................................... 8
(r) Title to Properties................................................ 9
(s) Tax Law Compliance................................................. 9
(t) Company Not an "Investment Company"................................ 9
(u) Insurance.......................................................... 9
(v) No Price Stabilization or Manipulation............................. 10
(w) Related Party Transactions......................................... 10
(x) No Unlawful Contributions or Other Payments........................ 10
(y) Company's Accounting System........................................ 10
(z) ERISA Compliance................................................... 10
(aa) Year 2000.......................................................... 11
(bb) Environmental Laws................................................. 11
(cc) Lock-Up Agreements................................................. 12
(dd) Officer's Certificates............................................. 12
Section 2. Purchase, Sale and Delivery of the Common Shares................... 13
(a) The Firm Common Shares............................................. 13
(b) The First Closing Date............................................. 13
(c) The Optional Common Shares; the Second Closing Date................ 13
(d) Public Offering of the Common Shares............................... 14
(e) Payment for the Common Shares...................................... 14
(f) Delivery of the Common Shares...................................... 14
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(g) Delivery of Prospectus to the Underwriters......................... 15
Section 3. Additional Covenants of the Company................................ 15
(a) Representatives' Review of Proposed Amendments and Supplements 15
(b) Securities Act Compliance.......................................... 15
(c) Compliance with NASD Rules......................................... 16
(d) Amendments and Supplements to the Prospectus and
Other Securities Act Matters....................................... 16
(e) Copies of any Amendments and Supplements to the Prospectus......... 16
(f) Blue Sky Compliance................................................ 16
(g) Capitalization; Use of Proceeds.................................... 17
(h) Transfer Agent..................................................... 17
(i) Quotation.......................................................... 17
(j) Rule 158 Earnings Statement........................................ 17
(k) Periodic Reporting Obligations..................................... 17
(l) Agreement Not to Offer or Sell Additional Securities............... 17
(m) Compliance with Rule 463........................................... 18
(n) Future Reports to the Representatives.............................. 18
Section 4. Payment of Expenses................................................ 18
Section 5. Conditions of the Obligations of the Underwriters.................. 19
(a) Accountants' Comfort Letter........................................ 19
(b) Compliance with Registration Requirements; No Stop Order;
No Objection from NASD............................................. 19
(c) No Material Adverse Change or Ratings Agency Change................ 20
(d) Opinion of Counsel for the Company................................. 20
(e) Opinion of Counsel for the Underwriters............................ 21
(f) Officers' Certificate.............................................. 21
(g) Secretary's Certificate............................................ 22
(h) Bring-down Comfort Letter.......................................... 22
(i) The Bank Credit Facility Amendment................................. 22
(j) Reclassification and Stock-Split................................... 22
(k) Additional Documents............................................... 22
Section 6. Reimbursement of Underwriters' Expenses............................ 23
Section 7. Effectiveness of this Agreement.................................... 23
Section 8. Indemnification.................................................... 23
(a) Indemnification of the Underwriters................................ 23
(b) Indemnification of the Company, its Directors and Officers 25
(c) Notifications and other Indemnification Procedures................. 26
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(d) Settlements............................................... 27
(e) Indemnification for Reserved Securities................... 27
Section 9. Contribution.............................................. 27
Section 10. Default of One or More of the Several Underwriters........ 29
Section 11. Termination of this Agreement............................. 29
Section 12. Representations and Indemnities to Survive Delivery....... 30
Section 13. Default by the Company.................................... 30
Section 14. Notices................................................... 30
Section 15. Successors................................................ 31
Section 16. Partial Unenforceability.................................. 32
Section 17. Governing Law Provisions.................................. 32
(a) Governing Law............................................. 32
(b) Consent to Jurisdiction................................... 32
(c) Waiver of Immunity........................................ 32
Section 18. General Provisions........................................ 32
Schedules
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Schedule A Schedule of Underwriters
Schedule B Schedule of Patents and Trademarks
Schedule C Schedule of Persons and Entities Subject to Lock-Up
Exhibits
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Exhibit A Form of Opinion of Counsel for the Company
Exhibit B Form of Opinion of Intellectual Property Counsel for the Company
Exhibit C Form of Lock-Up Agreement
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___________ Shares
THERMA-WAVE, INC.
Common Stock
UNDERWRITING AGREEMENT
----------------------
_______________,1999
BANC OF AMERICA SECURITIES LLC
▇▇▇▇▇▇ BROTHERS INC.
As Representatives of the several Underwriters
c/o BANC OF AMERICA SECURITIES LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Therma-Wave, Inc., a Delaware corporation (the "Company"), proposes to
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issue and sell to the several underwriters named in Schedule A (the
"Underwriters") an aggregate of [____] shares (the "Firm Common Shares") of its
------------- ------------------
Common Stock, $.01 par value per share (the "Common Stock"). In addition, the
------------
Company has granted to the Underwriters an option to purchase up to an
additional [____] shares (the "Optional Common Shares") of Common Stock, as
----------------------
provided in Section 2. The Firm Common Shares and, if and to the extent such
option is exercised, the Optional Common Shares are collectively called the
"Common Shares". Banc of America Securities LLC ("Banc of America") and ▇▇▇▇▇▇
-------------- ---------------
Brothers Inc. have agreed to act as representatives of the several Underwriters
(in such capacity, the "Representatives") in connection with the offering and
---------------
sale of the Common Shares.
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-1 (File No.
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333-76019), which contains a form of prospectus to be used in connection with
the public offering and sale of the Common Shares. 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 and the rules and regulations promulgated thereunder
(collectively, the "Securities Act"), including any information deemed to be a
--------------
part thereof at the time of effectiveness pursuant to Rule 430A or Rule 434
under the Securities 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 Common Shares, is called the "Prospectus"; provided,
----------
however, if the Company has, with the consent of Banc of America, elected to
rely upon Rule 434 under the Securities Act, the term "Prospectus" shall mean
----------
the Company's prospectus subject to completion (each a "preliminary prospectus")
----------------------
dated [______] (such preliminary prospectus is called the "Rule 434 preliminary
--------------------
prospectus"), together with the applicable term sheet (the "Term Sheet")
---------- ----------
prepared and filed by the Company with the Commission under Rules 434 and 424(b)
under the Securities Act and all references in this Agreement to the date of the
Prospectus shall mean the date of the Term Sheet. All references in this
Agreement to the Registration Statement, the Rule 462(b) Registration Statement,
a preliminary prospectus, the Prospectus or the Term Sheet, 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 ("▇▇▇▇▇").
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The Company and the Underwriters agree that up to [________] shares of the
Common Stock to be purchased by the Underwriters (the "Reserved Shares") shall
---------------
be reserved for sale by the Underwriters to certain eligible employees and
persons having business relationships with the Company, as part of the
distribution of the Common Shares by the Underwriters, subject to the terms of
this Agreement, the applicable rules, regulations and interpretations of the
National Association of Securities Dealers, Inc. (the "NASD") and all other
----
applicable laws, rules and regulations. To the extent that such Reserved Shares
are not orally confirmed for purchase by such eligible employees and persons
having business relationships with the Company by the end of the first business
day after the date of this Agreement, such Reserved Shares may be offered to the
public as part of the public offering contemplated hereby. Any capitalized
term used but not otherwise defined herein is used herein with the meaning
ascribed to such term in the Registration Statement.
The Company hereby confirms its agreements with the Underwriters as
follows:
Section 1. Representations and Warranties of the Company. The Company hereby
---------------------------------------------
represents, warrants and covenants to each Underwriter as follows:
(a) Compliance with Registration Requirements. Each of the Registration
-----------------------------------------
Statement and any Rule 462(b) Registration Statement has 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 Registration Statement
or any 462(b) Registration Statement is in effect and, to the best knowledge of
the Company, no proceedings for such purpose have been instituted or are pending
or are contemplated or threatened by the Commission.
Each preliminary prospectus and the Prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment thereto,
or filed pursuant to Rule 424 under the Securities Act, complied when so filed
in all material respects with the Securities Act
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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 Common 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 up to and including the First Closing Date (and, if any
Optional Common Shares are purchased, the Second Closing Date, if applicable),
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, and the Prospectus, any preliminary
prospectus and any supplement thereto or prospectus wrapper prepared in
connection therewith, at their respective dates and at all subsequent times up
to and including the First Closing Date (and, if any Optional Common Shares are
purchased, the Second Closing Date, if applicable), complied and will comply in
all material respects with any applicable laws or regulations of foreign
jurisdictions in which the Prospectus and such preliminary prospectus, as
amended or supplemented, if applicable, are distributed in connection with the
offer and sale of Reserved Securities. The Prospectus, any preliminary
prospectus, and any supplement thereto or prospectus wrapper prepared in
connection therewith, each as amended or supplemented, as of its date and as of
the First Closing Date (and, if any Optional Common Shares are purchased, as of
the Second Closing Date, if applicable), 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. If Rule 434 is used, the Company will comply
with the requirements of Rule 434 and the Prospectus shall not be "materially
different", as such term is used in Rule 434, from the prospectus included in
the Registration Statement at the time it became effective. 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 preliminary
prospectus 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 each of the Representatives and counsel for the Underwriters,
without charge, one complete manually signed copy of the Registration Statement
(including all exhibits filed therewith or incorporated therein by reference)
and signed copies 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. The copies of the Registration Statement
and each amendment thereto furnished
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to the Underwriters are identical to the electronically transmitted copies
thereof filed with the Commission pursuant to ▇▇▇▇▇, except to the extent
permitted by Regulation S-T.
(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 Common Shares, any offering material in connection with the offering and
sale of the Common 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 against the Company 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 Common Shares. The Common 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 Company
pursuant to this Agreement against payment of the consideration set forth
herein, will be validly issued, fully paid and nonassessable. The Common Stock
conforms to all statements relating thereto contained in the Prospectus and such
description conforms in all material respects to the rights set forth in the
instruments defining the same; no holder of the Common Shares will be subject to
personal liability by reason of being such a holder; and the issuance of the
Common Shares is not subject to any preemptive rights, rights of first refusal
or other similar rights to subscribe for or purchase securities of the Company.
(f) 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 included in the
offering contemplated by this Agreement or otherwise by the Company under the
Securities Act, except for such rights as have been duly waived, which rights,
if any, are described in the Prospectus under the heading "Shares Eligible for
Future Sale -- Registration Rights Agreement".
(g) No Material Adverse Change. Except as otherwise disclosed in the
--------------------------
Prospectus, 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 financial condition, 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 is called a "Material Adverse Change"); and (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
-4-
not in the ordinary course of business. Since December 18, 1996, 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.
(h) Independent Accountants. PricewaterhouseCoopers LLP and Ernst & Young
-----------------------
LLP, who have each expressed their opinion 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.
(i) 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, stockholders' equity and cash flows for the periods specified.
Such financial statements and supporting schedules have been prepared in
conformity with generally accepted accounting principles 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
Historical Financial Data", "Selected Historical Financial Data",
"Capitalization", "Dilution", "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Results of Operations" and "-- Quarterly
Results of Operations" fairly present in all material respects the information
set forth therein on a basis consistent with that of the audited financial
statements contained in the Registration Statement.
(j) 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 in good standing under the laws of the jurisdiction of
its incorporation and has corporate power and the authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and, in the case of the Company, to enter into and perform its
obligations under this Agreement. The Company and each subsidiary of the
Company is duly qualified as a foreign corporation to transact business and is
in good standing in each other jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except for such jurisdictions where the failure to so
qualify or to be in good standing would not reasonably be expected to,
individually or in the aggregate, result in a Material Adverse Change. All of
the issued and outstanding capital stock of each subsidiary of the Company has
been duly authorized and validly issued, is fully paid and nonassessable and is
owned by the Company, directly or through its subsidiaries, free and clear of
any security interest, mortgage, pledge, lien, encumbrance, equity or other
claim. The Company does not own or control, directly or
-5-
indirectly, any corporation, association or other entity other than the
subsidiaries listed in Exhibit 21.1 to the Registration Statement.
(k) Capitalization and Other Capital Stock Matters. The authorized,
----------------------------------------------
issued and outstanding capital stock of the Company is as set forth in the
Prospectus in the column entitled "Actual" under the caption "Capitalization"
(except for subsequent issuances, if any, pursuant to employee benefit plans
described in the Prospectus or upon exercise of outstanding options described in
the Prospectus), and the Common Stock (including the Common Shares) conforms in
all material respects to the description thereof contained in the Prospectus.
All of the issued and outstanding shares of Common Stock have been duly
authorized and validly issued, are fully paid and nonassessable and have been
issued in compliance with federal and state securities laws. None of the
outstanding shares of Common Stock 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 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 presents in all material respects the information required to be shown
with respect to such plans, arrangements, options and rights.
(l) Nasdaq National Market Quotation. The Common Shares have been
--------------------------------
approved for quotation on the Nasdaq National Market, subject only to official
notice of issuance.
(m) Non-Contravention of Existing Instruments; No Further Authorizations or
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Approvals Required. Neither the Company nor any of its subsidiaries is in
------------------
violation of its charter or by-laws or is in default (or, with the giving of
notice or lapse of time, would be in default) (each a "Default") in the
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performance or observance of any obligation, agreement, covenant or other
condition contained in any indenture, mortgage, deed of trust, loan or credit
agreement, note, contract, franchise, lease or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which it or any of
them may be bound, or to which any of the property or assets of the Company or
any of its subsidiaries is subject (each, an "Existing Instrument"), except for
-------------------
such Defaults as would not reasonably be expected to, individually or in the
aggregate, result in a Material Adverse Change. The Company's execution,
delivery and performance of this Agreement and consummation of the transactions
contemplated hereby and by the Prospectus (including the issuance and sale of
the Common Shares and the use of proceeds from the sale of the Common Shares as
described in the Prospectus under the caption "Use of Proceeds" and the
reclassification (the "Reclassification") and stock-split (the "Stock-Split"),
as described in the Prospectus under the caption "The Reclassification") and
compliance by the Company with its obligations hereunder (i) have been duly
authorized by all necessary corporate action and do not and will not result in
any violation of the provisions of the charter or by-laws of the Company or any
of its subsidiaries, (ii) do
-6-
not and will not, whether with or without the giving of notice or passage of
time or both, conflict with or constitute a breach of, or Default or Repayment
Event (as defined below) under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or any of
its subsidiaries pursuant to, or require the consent of any other party to, any
Existing Instrument or employee benefit or similar plan of the Company or any of
its subsidiaries, except for such conflicts, breaches, Defaults, Repayment
Events, liens, charges or encumbrances as would not, individually or in the
aggregate, result in a Material Adverse Change, and (iii) will not result in any
violation of any law, statute, rule, judgment, order, writ, administrative
regulation or administrative or court decree applicable to the Company or any of
its subsidiaries, except for such violations as would not, individually or in
the aggregate, result in a Material Adverse Change. No consent, approval,
authorization or other order of, or registration or filing with, any court or
other governmental or regulatory authority or agency, is required for the
Company's execution, delivery and performance of this Agreement and consummation
of the transactions contemplated hereby and by the Prospectus (including the
offering, issuance and sale of the Common Shares, the Reclassification and the
Stock Split), except (i) such as have been obtained or made by the Company and
are in full force and effect under the Securities Act, applicable state
securities or blue sky laws and from the NASD, and (ii) such as have been
obtained under the laws and regulations of jurisdictions outside the United
States in which Reserved Securities are offered. As used herein, a "Repayment
---------
Event" means any event or condition which gives the holder of any note,
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debenture or other evidence of indebtedness (or any person acting on such
holder's behalf) the right to require the repurchase, redemption or repayment of
all or a portion of such indebtedness by the Company or any of its subsidiaries.
(n) Compliance with Laws. The Company and each of its subsidiaries are
--------------------
conducting their business in compliance with all the local, state, federal and
foreign laws, rules and regulations of the jurisdictions in which each of the
Company and its subsidiaries is conducting business, except where failure to be
so in compliance, singly or in the aggregate, would not result in a Material
Adverse Change.
(o) No Material Actions or Proceedings. There are no legal or governmental
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actions, suits or proceedings pending or, to the best of the Company's
knowledge, threatened and, to the best of the Company's knowledge, there are no
inquiries or investigations pending or threatened, in each case (i) against or
affecting the Company or any of its subsidiaries, (ii) which has as the subject
thereof any officer or director of, or property owned or leased by, the Company
or any of its subsidiaries or (iii) relating to environmental or discrimination
matters, where in any such case, if determined adversely to the Company or any
subsidiary, would reasonably be expected to result in a Material Adverse Change
or adversely affect the consummation of the transactions contemplated by this
Agreement. No material labor dispute with the employees of the Company or any
of its subsidiaries exists or, to the best of the Company's knowledge, is
threatened or imminent and the Company is not aware of any existing or imminent
labor disturbance by the employees of any of its or any subsidiary's principal
suppliers, manufacturers, customers or contractors, which, in either case, may
-7-
reasonably be expected to result in a Material Adverse Change. The aggregate
outcome of all pending legal or governmental proceedings to which the Company or
any of its subsidiaries is a party or of which any of their respective property
or assets is the subject which are not described in the Registration Statement,
including ordinary routine litigation incidental to the business, would not
reasonably be expected to result, individually or in the aggregate, in a
Material Adverse Change.
(p) Intellectual Property Rights. The Company and its subsidiaries own or
----------------------------
possess sufficient trademarks, trade names, service marks, patents, patent
rights, copyrights, licenses, approvals, inventions, know-how (including trade
secrets and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures) and other similar rights and intellectual
property including specifically, but without limitation, the patents and
trademarks listed on Schedule B (collectively, "Intellectual Property Rights")
----------------------------
necessary to conduct their businesses as now conducted; and the expected
expiration of any of such Intellectual Property Rights would not result in a
Material Adverse Change. Except as otherwise disclosed in the Prospectus,
neither the Company nor any of its subsidiaries has received any notice of
infringement or conflict nor is otherwise aware of any infringement or conflict
with asserted rights of others with respect to any Intellectual Property Rights
or of any facts or circumstances which would render any Intellectual Property
Rights invalid or inadequate to protect the interests of the Company or any of
its subsidiaries therein, and which infringement or conflict, if the subject of
an unfavorable decision, ruling, or finding, or invalidity or inadequacy, singly
or in the aggregate would reasonably be expected to result in a Material Adverse
Change. The Company has good and marketable title to the patents and patent
applications referenced in the Prospectus.
(q) All Necessary Permits, etc. The Company and each subsidiary possess
---------------------------
such valid and current certificates, licenses, authorizations or permits
(collectively, "Governmental Licenses") issued by the appropriate state, federal
---------------------
or foreign regulatory agencies or bodies necessary to conduct their respective
businesses (other than any the absence of which would not, singly or in the
aggregate, reasonably be expected to result in a Material Adverse Change), the
Company and its subsidiaries are in compliance with the terms and conditions of
all such Governmental Licenses, except where the failure so to comply would not,
singly or in the aggregate, reasonably be expected to result in a Material
Adverse Change, all of the Governmental Licenses are valid and in full force and
effect, except when the invalidity of such Governmental Licenses or the failure
of such Governmental Licenses to be in full force and effect would not
reasonably be expected to result in a Material Adverse Change, and neither the
Company nor any subsidiary has received any notice, or is otherwise aware, of
proceedings relating to the revocation or modification of, or non-compliance
with, any such certificate, license, authorization or permit which, singly or in
the aggregate, if the subject of an unfavorable decision, ruling or finding,
would reasonably be expected to result in a Material Adverse Change.
-8-
(r) Title to Properties. The Company and each of its subsidiaries has
-------------------
good and marketable title to all real property owned by the Company and its
subsidiaries and has good title to all other properties and assets reflected as
owned in the financial statements referred to in Section 1(i) above (or
elsewhere in the Prospectus) and has good title to all other properties owned by
them, in each case, except as disclosed in the Prospectus, 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 Company or
its subsidiaries. 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 to the Company
or its subsidiaries and neither the Company nor any of its subsidiaries has any
notice of any claim of any sort that has been asserted by anyone adverse to the
rights of the Company or any of its subsidiaries under any of the leases or
subleases referred to above, or affecting or questioning the rights of the
Company or such subsidiary to the continued possession of the leased or
subleased premises under any such lease or sublease except for such notices of
claims as would not reasonably be expected to result in a Material Adverse
Change.
(s) Tax Law Compliance. The Company and its subsidiaries have filed all
------------------
necessary federal, state and foreign income and franchise tax returns or have
properly requested extensions thereof 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 except as may be being contested in
good faith and by appropriate proceedings. The Company has made adequate
charges, accruals and reserves in the applicable financial statements referred
to in Section 1(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 subsidiaries has not been finally determined.
(t) Company Not an "Investment Company". The Company is not, and after the
-----------------------------------
issuance and sale of, and the receipt of payment for, the Common Shares and the
application of the net proceeds therefrom as described in the Prospectus will
not be, an "investment company" or an entity "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940, as amended
(the "Investment Company Act"), and will conduct its business in a manner so
----------------------
that it will not become subject to the Investment Company Act.
(u) 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 the Company has
reasonably deemed adequate and customary for its businesses including, but not
limited to, policies covering personal property owned or leased by the Company
and its subsidiaries against theft, damage, destruction, and acts of vandalism.
-9-
(v) No Price Stabilization or Manipulation. Neither the Company, nor any
--------------------------------------
of the Company's affiliates, has taken or will 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 Common Shares.
(w) 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.
(x) 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.
(y) Company's Accounting System. The Company maintains 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 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.
(z) 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. Except as would not
reasonably be expected to result in a Material Adverse Change, there is (i) no
"reportable event" (as defined under ERISA) that 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,
and (ii) no "employee benefit plan" established or maintained by the Company,
its subsidiaries or any of their ERISA Affiliates that, 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, except, in each case, such as would not reasonably be
expected to
-10-
result in a Material Adverse Change. 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, except where the failure to so
qualify would not reasonably be expected to result in a Material Adverse Change.
(aa) Year 2000. The Company has not incurred significant operating
---------
expenses or costs to ensure that its information systems will be Year 2000
Compliant (as defined below), other than as disclosed in the Prospectus. The
statements made under the caption "Year 2000" in the Prospectus are true,
complete and correct in all material respects and accurately reflect the
Company's state of readiness with respect to (i) all of the systems used in the
business, products, services or operations of the Company and its subsidiaries,
and (ii) all of the software, hardware, firmware and other technology that
constitute any part of the products and services manufactured, marketed,
licensed or sold in the past or present (or to be sold in the future) by the
Company or any of its subsidiaries. The Company is not aware of any failure to
be Year 2000 Compliant of (i) any third-party system used in connection with the
business, products, services or operations of the Company or any of its
subsidiaries, or (ii) any vendor, co-venturer, service provider or customer,
except in each case for such failures to be Year 2000 Compliant as would not
result in a Material Adverse Change.
For purposes of this Agreement, "Year 2000 Compliant" means that, without
-------------------
human intervention, the applicable system, application, product, service or
item: (A) will accurately receive, record, store, provide, recognize, recall and
process all date and time data; (B) will accurately perform all date- or time-
dependent calculations and operations; and (C) will not malfunction, cease to
function or provide invalid or incorrect results as a result of (i) any
calendar change; (ii) any date or time data; or (iii) the occurrence of any
particular date.
(bb) Environmental Laws. Except as would not, singly or in the aggregate,
------------------
result in a Material Adverse Change, (A) neither the Company nor any of its
subsidiaries is in violation of any federal, state, local or foreign statute,
law, rule, regulation, ordinance, code, policy or rule of common law or any
judicial or administrative interpretation thereof, including any judicial or
administrative order, consent, decree or judgment, relating to pollution or
protection of human health, the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata) or
wildlife, including, without limitation, laws and regulations relating to the
emission, discharge, release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum or
petroleum products (collectively, "Hazardous Materials") or to the manufacture,
-------------------
processing, distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Materials (collectively, "Environmental Laws"), which
------------------
violation includes, but is not limited to, noncompliance with any permits or
other governmental authorizations required for the operation of the business of
the Company or its subsidiaries under applicable Environmental Laws, or
noncompliance with the terms and conditions thereof, nor has the Company or any
of its subsidiaries received any written communication, whether from a
governmental authority,
-11-
citizens group, employee or otherwise, that alleges that the Company or any of
its subsidiaries is in violation of any Environmental Law, (B) the Company and
its subsidiaries have all permits, authorizations and approvals required under
any applicable Environmental Laws and are each in compliance with their
requirements, (C) there is no claim, action or cause of action filed with a
court or governmental authority or any administrative, regulatory or judicial
actions, suits, demands, demand letters, claims, liens, notices of noncompliance
or violation, investigation or proceedings with respect to which the Company has
received written notice, and no written notice to the Company by any person or
entity alleging potential liability for investigatory costs, cleanup costs,
governmental responses costs, natural resources damages, property damages,
personal injuries, attorneys' fees or penalties arising out of, based on or
resulting from the presence, or release into the environment, of any Hazardous
Materials at any location owned, leased or operated by the Company or any of its
subsidiaries, now or in the past (collectively, "Environmental Claims"),
------------- ------
pending or, to the best of the Company's knowledge, threatened against the
------
Company or any of its subsidiaries or any person or entity whose liability for
any Environmental Claim the Company or any of its subsidiaries has retained or
assumed either contractually or by operation of law nor are there any events or
circumstances that might reasonably be expected to form the basis for an
Environmental Claim, and (D) to the best of the Company's knowledge, there are
no past or present actions, activities, circumstances, conditions, events or
incidents, including, without limitation, the release, emission, discharge,
presence or disposal of any Hazardous Materials, that reasonably could result in
a violation of any Environmental Law or form the basis of a potential
Environmental Claim against the Company or any of its subsidiaries or against
any person or entity whose liability for any Environmental Claim the Company or
any of its subsidiaries has retained or assumed either contractually or by
operation of law.
(cc) Lock-Up Agreements. The Company has caused each person listed on
------------------
Schedule C hereto to furnish to you, on or prior to the date of this agreement,
a letter or letters, substantially in the form of Exhibit C hereto (the "Lock-Up
-------
Agreement"), pursuant to which each such person shall have agreed that during a
---------
period of 180 days from the date of the Prospectus, such person will not,
without the prior written consent of Banc of America Securities LLC, (i)
directly or indirectly, offer, pledge, sell, contract to sell, sell any option
or contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase or otherwise transfer or dispose of any
share of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or file or cause to be filed any registration
statement under the Securities Act with respect to any of the foregoing, or (ii)
enter into any swap or any other agreement or any transaction that transfers, in
whole or in part, directly or indirectly, the economic consequence of ownership
of the Common Stock, whether any such swap or transaction described in clause
(i) or (ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise and such agreements are in full force and
effect. The foregoing sentence shall not apply to the Common Shares to be sold
hereunder.
(dd) Officer's Certificates. Any certificate signed by an officer of the
----------------------
Company or
-12-
any of its subsidiaries delivered to the Representatives or to counsel for the
Underwriters in connection with the consummation of the transactions
contemplated hereby and dated the date hereof, the First Closing Date or the
Second Closing Date shall be deemed to be a representation and warranty by the
Company to each Underwriter as to the matters covered thereby.
Section 2. Purchase, Sale and Delivery of the Common Shares.
------------------------------------------------
(a) The Firm Common Shares. The Company agrees to issue and sell to the
----------------------
several Underwriters the Firm Common Shares upon the terms herein set forth. On
the basis of the representations, warranties and agreements herein contained,
and upon the terms but subject to the conditions herein set forth, the
Underwriters agree, severally and not jointly, to purchase from the Company the
respective number of Firm Common Shares set forth opposite their names on
Schedule A. The purchase price per Firm Common Share to be paid by the several
Underwriters to the Company shall be $[____] per share.
(b) The First Closing Date. Delivery of certificates for the Firm Common
----------------------
Shares to be purchased by the Underwriters and payment therefor shall be made at
the offices of Banc of America, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
(or such other place as may be agreed to by the Company and the Representatives)
at 6:00 a.m. San Francisco time, on [____], or such other time and date not
later than 10:30 a.m. San Francisco time, on [____] as the Representatives shall
designate by notice to the Company (the time and date of such closing are called
the "First Closing Date"). The Company hereby acknowledges that circumstances
------------------
under which the Representatives may provide notice to postpone the First Closing
Date as originally scheduled include, but are in no way limited to, any
determination by the Company or the Representatives to recirculate to the public
copies of any amended or supplemented Prospectus or a delay as contemplated by
the provisions of Section 10.
(c) The Optional Common Shares; the Second Closing Date. In addition,
---------------------------------------------------
on the basis of the representations, warranties and agreements herein contained,
and upon the terms but subject to the conditions herein set forth, the Company
hereby grants an option to the several Underwriters to purchase, severally and
not jointly, up to an aggregate of [_____] Optional Common Shares from the
Company at the purchase price per share to be paid by the Underwriters for the
Firm Common Shares. The option granted hereunder is for use by the Underwriters
solely in covering any over-allotments in connection with the sale and
distribution of the Firm Common Shares. The option granted hereunder may be
exercised at any time (but not more than once) upon notice by the
Representatives to the Company, which notice may be given at any time within 30
days from the date of this Agreement. Such notice shall set forth (i) the
aggregate number of Optional Common Shares as to which the Underwriters are
exercising the option, (ii) the names and denominations in which the
certificates for the Optional Common Shares are to be registered and (iii) the
time, date and place at which such certificates will be delivered (which time
and date may be simultaneous with, but not earlier than, the First Closing Date;
and in such case the term "First Closing
-------------
-13-
Date" shall refer to the time and date of delivery of certificates for the Firm
----
Common Shares and the Optional Common Shares). Such time and date of delivery,
if subsequent to the First Closing Date, is called the "Second Closing Date" and
-------------------
shall be determined by the Representatives and shall not be earlier than three
nor later than five full business days after delivery of such notice of
exercise. If any Optional Common Shares are to be purchased, each Underwriter
agrees, severally and not jointly, to purchase the number of Optional Common
shares (subject to such adjustments to eliminate fractional shares as the
Representatives may determine) that bears the same proportion to the total
number of Optional Common Shares to be purchased as the number of Firm Common
Shares set forth on Schedule A opposite the name of such Underwriter bears to
the total number of Firm Common Shares. 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 Common Shares. The Representatives hereby
------------------------------------
advise the Company that the Underwriters intend to offer for sale to the
public, as described in the Prospectus, their respective portions of the Common
Shares as soon after this Agreement has been executed 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 Common Shares. Payment for the Common Shares shall be
-----------------------------
made at the First Closing Date (and, if applicable, at the Second Closing Date)
by wire transfer of immediately available funds to the order of the Company.
It is understood that the Representatives have been authorized, for their
own account and the accounts of the several Underwriters, to accept delivery of
and receipt for, and make payment of the purchase price for, the Firm Common
Shares and any Optional Common Shares the Underwriters have agreed to purchase.
Banc of America, individually and not as the Representatives of the
Underwriters, may (but shall not be obligated to) make payment for any Common
Shares to be purchased by any Underwriter whose funds shall not have been
received by the Representatives by the First Closing Date or the Second Closing
Date, as the case may be, for the account of such Underwriter but such payment
shall not relieve such Underwriter from any of its obligations under this
Agreement.
(f) Delivery of the Common Shares. The Company shall deliver, or cause to
-----------------------------
be delivered, to the Representatives for the accounts of the several
Underwriters certificates, if any, for the Firm Common Shares 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 set forth herein.
The Company shall also deliver, or cause to be delivered, to the Representatives
for the accounts of the several Underwriters, certificates, if any, for the
Optional Common Shares the Underwriters have agreed to purchase at the First
Closing Date or the Second Closing Date, as the case may be, against the
irrevocable release of a wire transfer of immediately available funds for the
amount of the purchase price therefor set forth herein. The certificates, if
any, for the Common Shares shall be in definitive form and registered in such
-14-
names and denominations as the Representatives shall have requested at least two
full business days prior to the First Closing Date (or the Second Closing Date,
as the case may be) and shall be made available for inspection on the business
day preceding the First Closing Date (or the Second Closing Date, as the case
may be) at a location in New York City as the Representatives may designate.
Time shall be of the essence, and delivery at the time and place specified in
this Agreement is a further condition to the obligations of the Underwriters.
(g) Delivery of Prospectus to the Underwriters. Not later than 12:00
------------------------------------------
p.m. on the second business day following the date the Common Shares are
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 reasonably request.
Section 3. Additional Covenants of the Company. The Company further covenants
-----------------------------------
and agrees with each Underwriter as follows:
(a) Representatives' Review of Proposed Amendments and Supplements.
--------------------------------------------------------------
During such 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"), prior to amending or supplementing the Registration Statement
------
(including any registration statement filed under Rule 462(b) under the
Securities Act), any Term Sheet or the Prospectus, the Company shall furnish to
the Representatives for review a copy of each such proposed amendment or
supplement a reasonable amount of time prior to such proposed filing, and the
Company shall not file any such proposed amendment or supplement to which the
Representatives or counsel for the Underwriters reasonably object.
(b) Securities Act Compliance. After the date of this Agreement, the
-------------------------
Company shall promptly advise the Representatives in writing (i) of the receipt
of any comments of, or requests for additional or supplemental information from,
the Commission, (ii) of the time and date of any filing of any post-effective
amendment to the Registration Statement or any amendment or supplement to any
preliminary prospectus or the Prospectus, (iii) of the time and date that any
post-effective amendment to the Registration Statement becomes effective and
(iv) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or any post-effective amendment
thereto or of any order preventing or suspending the use of any preliminary
prospectus or the Prospectus, or of any proceedings to remove, suspend or
terminate from listing or quotation the Common Stock from any securities
exchange upon which it is listed for trading or included or designated for
quotation, or of the threatening, to the extent known by the Company, or
initiation of any proceedings for any of such purposes. If the Commission shall
enter any such stop order at any time, the Company will use its reasonable best
efforts to obtain the lifting of such order at the earliest possible moment.
Additionally, the Company agrees that it shall comply with the provisions of
Rules 424(b), 430A and 434, as applicable, under the Securities Act and will use
its reasonable best
-15-
efforts to confirm that any filings made by the Company under such Rule 424(b)
were received in a timely manner by the Commission.
(c) Compliance with NASD Rules. The Company hereby agrees that it will
--------------------------
ensure that the Reserved Securities will be restricted as required by the NASD
or the NASD rules from sale, transfer, assignment, pledge or hypothecation for a
period of three months following the date of this Agreement. The Underwriters
will notify the Company as to which persons will need to be so restricted. At
the request of the Underwriters, the Company will direct the transfer agent to
place a stop transfer restriction upon such securities for such period of time.
Should the Company release, or seek to release, from such restrictions any of
the Reserved Securities, the Company agrees to reimburse the Underwriters for
any reasonable expenses (including, without limitation, legal expenses) they
incur in connection with such release.
(d) Amendments and Supplements to the Prospectus and Other Securities Act
---------------------------------------------------------------------
Matters. If, during the Prospectus Delivery Period, any event shall occur or
-------
condition exist as a result of which it is necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not misleading,
or if in the reasonable opinion of the Representatives or counsel for the
Underwriters it is otherwise necessary to amend or supplement the Prospectus to
comply with law, the Company agrees to promptly prepare (subject to Section 3(a)
hereof), file with the Commission and furnish at its own expense to the
Underwriters and to dealers, amendments or supplements to the Prospectus so that
the statements in the Prospectus as so amended or supplemented will not, in the
light of the circumstances when the Prospectus is delivered to a purchaser, be
misleading or so that the Prospectus, as amended or supplemented, will comply
with law. The Underwriters shall cease to use the Prospectus upon receiving
notice from the Company that an amendment or supplement is required under this
paragraph.
(e) Copies of any Amendments and Supplements to the Prospectus. The
----------------------------------------------------------
Company agrees to furnish the Representatives, without charge, during the
Prospectus Delivery Period, as many copies of the Prospectus and any amendments
and supplements thereto as the Representatives may reasonably request. The
Prospectus and any amendments or supplements thereto furnished to the
Underwriters will be identical to the electronically transmitted copies thereof
filed with the Commission pursuant to ▇▇▇▇▇, except to the extent permitted by
Regulation S-T.
(f) Blue Sky Compliance. The Company shall cooperate with the
-------------------
Representatives and counsel for the Underwriters to qualify or register the
Common Shares for sale under (or obtain exemptions from the application of) the
state securities or blue sky laws or Canadian provincial securities laws and
applicable securities laws of other jurisdictions (domestic or foreign)
reasonably designated by the Representatives, and shall comply with such laws
and shall continue such qualifications, registrations and exemptions in effect
so long as required for the distribution of the Common Shares. The Company shall
not be required to qualify as a foreign corporation or to take any action that
would subject it to general service of process in
-16-
any such jurisdiction where it is not presently qualified or where it would be
subject to taxation as a foreign corporation in a jurisdiction in which it is
not currently subject to taxation as a foreign corporation. The Company will
advise the Representatives promptly of the suspension of the qualification or
registration of (or any such exemption relating to) the Common Shares for
offering, sale or trading in any jurisdiction or any initiation or threat of any
proceeding for any such purpose, and in the event of the issuance of any order
suspending such qualification, registration or exemption, the Company shall use
its reasonable best efforts to obtain the withdrawal thereof at the earliest
possible moment.
(g) Capitalization; Use of Proceeds. After giving effect to the
-------------------------------
assumptions set forth in the Prospectus under the caption "Capitalization", the
authorized, issued and outstanding Capital Stock of the Company is as set forth
in the Prospectus. The Company shall apply the net proceeds from the sale of the
Common Shares sold by it in the manner described under the caption "Use of
Proceeds" in the Prospectus.
(h) Transfer Agent. The Company shall engage and maintain, at its
--------------
expense, a registrar and transfer agent for the Common Stock.
(i) Quotation. The Company will use its best efforts to effect and
---------
maintain the quotation of the Common Shares on the Nasdaq National Market and
will file with the Nasdaq National Market all documents and notices required by
the Nasdaq National Market of companies that have securities that are traded in
the over-the-counter market and quotations for which are reported by the Nasdaq
National Market.
(j) Rule 158 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 the twelve-month period
ending [_____] that satisfies the provisions of, and provides the benefits
contemplated by, 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 National Market all reports and documents required to be filed under the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
------------
(l) Agreement Not to Offer or Sell Additional Securities. During the
----------------------------------------------------
period of 180 days following the date of the Prospectus, the Company will not,
without the prior written consent of Banc of America (which consent may be
withheld at the sole discretion of Banc of America), directly or indirectly,
sell, offer, contract or grant any option to sell, pledge, transfer or establish
an open "put equivalent position" within the meaning of Rule 16a-1(h) under the
Exchange Act, or otherwise dispose of or transfer, or announce the offering of,
or file any registration statement under the Securities Act in respect of, any
shares of Common Stock, options or warrants to acquire shares of the Common
Stock or securities exchangeable or exercisable for or convertible into shares
of Common Stock, whether now owned or
-17-
hereafter acquired (other than as contemplated by this Agreement with respect to
the Common Shares); provided, however, that the Company may (i) issue shares of
its Common Stock or options to purchase shares of its Common Stock, or Common
Stock upon exercise of options, pursuant to any stock option, stock bonus or
other stock plan or arrangement described in the Prospectus, (ii) following the
90th day after the date of this Agreement, file one or more Registration
Statements on Form S-8, and (iii) issue shares in connection with any
acquisition if the recipients thereof agree in writing (on terms no less
favorable to Banc of America than as set forth in the Lock-Up Agreement) not to
sell, offer, dispose of or otherwise transfer any such shares during such 180
day period without the prior written consent of Banc of America (which consent
may be withheld at the sole discretion of the Banc of America).
(m) Compliance with Rule 463. The Company will file with the Commission
------------------------
such reports and information as may be required pursuant to Rule 463 under the
Securities Act.
(n) Future Reports to the Representatives. During the period of two
-------------------------------------
years hereafter the Company will furnish to the Representatives at ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Attention: ▇▇▇ ▇▇▇▇▇▇: (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.
Section 4. Payment of Expenses. The Company agrees to pay all costs, fees and
-------------------
expenses incurred in connection with the performance of its obligations
hereunder and in connection with the transactions contemplated hereby, including
without limitation (i) all expenses incident to the issuance and delivery of the
Common Shares (including all printing and engraving costs), (ii) all fees and
expenses of the registrar and transfer agent of the Common Stock, (iii) all
necessary issue, transfer and other stamp taxes in connection with the issuance
and sale of the Common Shares to the Underwriters, (iv) all fees and expenses of
the Company's counsel, 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, any Term Sheet and the
Prospectus, and all amendments and supplements thereto, and this Agreement, (vi)
all filing fees, reasonable attorneys' fees and reasonable expenses incurred by
the Company or the Underwriters in connection with qualifying or registering (or
obtaining exemptions from the qualification or registration of) all or any part
of the Common Shares for offer and sale under the state securities or blue sky
laws or the provincial securities laws of Canada or securities laws of any other
jurisdiction, and, if requested by the Representatives, preparing and printing
-18-
a "Blue Sky Survey" or memorandum, and any supplements thereto, and 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's review and approval of the
Underwriters' participation in the offering and distribution of the Common
Shares, (viii) the fees and expenses associated with the listing and inclusion
of the Common Shares on the Nasdaq National Market, (ix) all costs and expenses
of the Underwriters, including the reasonable fees and disbursements of counsel
for the Underwriters not to exceed $10,000, in connection with matters related
to the Reserved Securities which are designated by the Company for sale to
employees and others having a business relationship with the Company, and (x)
all other fees, costs and expenses referred to in Item 13 of Part II of the
Registration Statement. Except as provided in this Section 4, Section 6, Section
8 and Section 9 hereof, the Underwriters shall pay their own expenses, including
the fees and disbursements of their counsel.
Section 5. Conditions of the Obligations of the Underwriters. The obligations
-------------------------------------------------
of the several Underwriters to purchase and pay for the Common Shares as
provided herein on the First Closing Date and, with respect to the Optional
Common Shares, the Second Closing Date, shall be subject to the accuracy of the
representations and warranties on the part of the Company set forth in Section 1
hereof as of the date hereof and as of the First Closing Date as though then
made and, with respect to the Optional Common shares, as of the Second Closing
Date as though then made, or in certificates of any officer of the Company or
any of its subsidiaries delivered pursuant to the provisions hereof, and to the
timely performance by the Company of its covenants and other obligations
hereunder, and to each of the following additional conditions:
(a) Accountants' Comfort Letter. On the date hereof, the Representatives
---------------------------
shall have received from PricewaterhouseCoopers LLP, independent public or
certified public accountants for the Company, a letter dated the date hereof
addressed to the Underwriters, in form and substance satisfactory to the
Representatives, containing statements and information of the type ordinarily
included in accountant's "comfort letters" to underwriters, delivered according
to Statement of Auditing Standards No. 72 (or any successor bulletin), with
respect to the audited and unaudited financial statements and certain financial
information contained in the Registration Statement and the Prospectus (and the
Representatives shall have received an additional 4 conformed copies of such
accountants' letter for each of the several Underwriters).
(b) Compliance with Registration Requirements; No Stop Order; No
------------------------------------------------------------
Objection from NASD. The Registration Statement (including any Rule 462(b)
-------------------
Registration Statement) shall have become effective and after effectiveness of
this Agreement and prior to the First Closing Date and, with respect to the
Optional Common Shares, the Second Closing Date:
(i) the Company shall have filed the Prospectus with the Commission
(including the information required by Rule 430A under the Securities Act) in
the manner and within the time period required by Rule 424(b) under the
Securities Act; or the Company shall have filed
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a post-effective amendment to the Registration Statement containing the
information required by such Rule 430A, and such post-effective amendment shall
have become effective; or, if the Company elected to rely upon Rule 434 under
the Securities Act and obtained the Representatives' consent thereto, the
Company shall have filed a Term Sheet with the Commission in the manner and
within the time period required by such Rule 434(b);
(ii) no stop order suspending the effectiveness of the Registration
Statement, any Rule 462(b) Registration Statement, or any post-effective
amendment to the Registration Statement, shall be in effect and no proceedings
for such purpose shall have been instituted or threatened by the Commission and
any request on the part of the Commission for additional information shall have
been complied with to the reasonable satisfaction of the Underwriters; and
(iii) the NASD shall have confirmed that it will not raise any
objection to the fairness and reasonableness of the underwriting terms and
arrangements.
(c) No Material Adverse Change or Ratings Agency Change. For the period
---------------------------------------------------
from and after the date of this Agreement and prior to the First Closing Date
and, with respect to the Optional Common Shares, the Second Closing Date:
(i) in the judgment of the Representatives there shall not have
occurred any Material Adverse Change; and
(ii) there shall not have occurred any downgrading, nor shall any
notice have been given of any intended or potential downgrading or of any review
for a possible change that does not indicate the direction of the possible
change, in the rating accorded any securities of the Company or any of its
subsidiaries by any "nationally recognized statistical rating organization" as
such term is defined for purposes of Rule 436(g)(2) under the Securities Act.
(d) Opinion of Counsel for the Company. On each of the First Closing
----------------------------------
Date and the Second Closing Date the Representatives shall have received the
favorable opinion of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, counsel for the Company, dated as of such
closing date, reasonably satisfactory to the Representatives with respect to the
matters set forth in Exhibit A attached hereto and to such further effect as
counsel for the Underwriters may reasonably request. On each of the First
Closing Date and the Second Closing Date the Representatives shall have received
the favorable opinion of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P., intellectual property counsel
for the Company, dated as of such closing date, reasonably satisfactory to the
Representatives with respect to the matters set forth in Exhibit B attached
hereto and to such further effect as counsel for the Underwriters may reasonably
request. In each case, the Representatives shall have received an additional 4
conformed copies of such counsels' legal opinions for each of the several
Underwriters.
-20-
(e) Opinion of Counsel for the Underwriters. On each of the First Closing
---------------------------------------
Date and the Second Closing Date, if any, the Representatives shall have
received the favorable opinion of Ropes & ▇▇▇▇, counsel for the Underwriters,
dated as of such closing date, with respect to the matters set forth in
paragraphs (i), (v), (vi), (viii) (with respect to the captions "Description of
Capital Stock" and "Underwriting" under subparagraph (viii) only) and the next-
to-last paragraph of Exhibit A and the Representatives shall have received an
additional 4 conformed copies of such counsel's legal opinion for each of the
several Underwriters. In giving such opinion such counsel may rely, as to all
matters governed by the laws of jurisdictions other than the law of The
Commonwealth of Massachusetts and the federal law of the United States and the
General Corporation Law of the State of Delaware, upon the opinions of counsel
satisfactory to the Representatives. Such counsel may also state that, insofar
as such opinion involves factual matters, they have relied, to the extent they
deem proper, upon certificates of officers of the Company and its subsidiaries
and certificates of public officials.
(f) Officers' Certificate. On each of the First Closing Date and the
---------------------
Second Closing Date the Representatives shall have received a written
certificate executed by the Chairman of the Board, Chief Executive Officer or
President of the Company and the Chief Financial Officer or Chief Accounting
Officer of the Company, dated as of such Closing Date, to the effect set forth
in subsections (b) and (c)(ii) of this Section 5, and further to the effect
that:
(i) for the period from and after the date of this Agreement and
prior to such closing date, there has not occurred any Material Adverse Change;
(ii) the representations, warranties and covenants of the Company
set forth in Section 1 of this Agreement are true and correct with the same
force and effect as though expressly made on and as of such closing date;
(iii) 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 such
closing date;
(iv) the Registration Statement of the Company on Form S-1
(Registration No. 333-76019), in the form in which it was declared effective by
the Commission on [_____ __], 1999, and the Prospectus dated [________ __],
1999, contain all statements which are required to be stated therein in
accordance with the Securities Act and the rules and regulations of the
Commission thereunder. The Registration Statement does not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
the Prospectus does not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; and
(v) the Company has not waived and will not, during a period of 180
days from the date of the Prospectus, waive the provisions of the Registration
Agreement between the
-21-
Company and the investors party thereto described in the Prospectus under
the caption "Shares Eligible for Future Sale--Registration Agreement" regarding
lock-up agreements and, the Company has issued stop-transfer orders to the
transfer agent preventing the transfer of shares for a period of 180 days from
the date of the Prospectus with respect to all of the shares owned by such
investors and subject to the terms of the Registration Agreement.
(g) Secretary's Certificate. On each of the First Closing Date and the
-----------------------
Second Closing Date, if any, the Representatives shall have received a
certificate or certificates of the Secretary of the Company in form and
substance reasonably satisfactory to the Representatives. .
(h) Bring-down Comfort Letter. On each of the First Closing Date and the
-------------------------
Second Closing Date the Representatives shall have received from
PricewaterhouseCoopers LLP, independent public or certified public accountants
for the Company, a letter dated such date, in form and substance satisfactory to
the Representatives, to the effect that they reaffirm the statements made in the
letter furnished by them pursuant to subsection (a) of this Section 5, except
that the specified date referred to therein for the carrying out of procedures
shall be no more than three business days prior to the First Closing Date or
Second Closing Date, as the case may be (and the Representatives shall have
received an additional 4 conformed copies of such accountants' letter for each
of the several Underwriters).
(i) The Bank Credit Facility Amendment. Prior to the date hereof, the
----------------------------------
Representatives shall have received a written notification from the Company and
Bankers Trust Company, as the lead bank under the Bank Credit Facility, that the
Bank Credit Facility has been amended to permit the consummation of the
transactions contemplated hereby without triggering a Default thereunder.
(j) Reclassification and Stock-Split. On or prior to the First Closing
--------------------------------
Date, all of the outstanding shares of Class A Common Stock, $.01 par value per
share, Class B Common Stock, $.01 par value per share, and Class L Common Stock,
$.01 par value per share (the "Class L Common Stock") will be converted into
--------------------
shares of Common Stock, $.01 par value per share, and a Stock-Split will be
effected as to all of the then outstanding shares of Common Stock. Prior to the
Stock-Split, each outstanding share of Class L Common Stock will be reclassified
into one share of Common Stock plus an additional number of shares having a
value, based on the initial offering price per share of the Common Shares, as
set forth on the cover of the Prospectus, equal to the Preference Amount, as
such term is defined in the Prospectus, of the Class L Common Stock. Fractional
shares otherwise issuable as a result of the Reclassification and Stock-Split
will be rounded to the nearest whole number.
(k) Additional Documents. On or before each of the First Closing Date and
--------------------
the Second Closing Date, the Representatives and counsel for the Underwriters
shall have received such information, documents and opinions as they may
reasonably require for the purposes of enabling them to pass upon the issuance
and sale of the Common Shares as contemplated herein, or in order to evidence
the accuracy of any of the representations and warranties, or the
-22-
satisfaction of any of the conditions or agreements, herein contained and all
proceedings taken by the Company in connection with the issuance and sale of the
Common Shares as herein contemplated shall be satisfactory in form and substance
to the Representatives and counsel for the Underwriters.
If any condition specified in this Section 5 is not satisfied when and as
required to be satisfied, this Agreement may be terminated by the
Representatives by notice to the Company at any time on or prior to the First
Closing Date and, with respect to the Optional Common Shares, at any time on or
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 1, Section 4,
Section 6, Section 8 and Section 9 shall at all times be effective and shall
survive such termination.
Section 6. Reimbursement of Underwriters' Expenses. If this Agreement is
---------------------------------------
terminated by the Representatives pursuant to Section 5, Section 7, or Section
11(iv) or 11(v), or if the sale to the Underwriters of the Common Shares on the
First Closing Date is not consummated because of any refusal, inability or
failure on the part of the Company to perform any agreement herein or to comply
with any provision hereof, the Company agrees to reimburse 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 Common Shares, including but not limited to fees and
disbursements of counsel, printing expenses, travel expenses, postage, delivery,
facsimile and telephone charges.
Section 7. Effectiveness of this Agreement. This Agreement shall not become
-------------------------------
effective until the later of (i) the execution of this Agreement by the parties
hereto and (ii) notification by the Commission to the Company and the
Representatives of the effectiveness of the Registration Statement under the
Securities Act.
Prior to such effectiveness, this Agreement may be terminated by any party
by notice to each of the other parties hereto, and any such termination shall be
without liability on the part of (a) the Company to any Underwriter, except that
the Company shall be obligated to reimburse the expenses of the Representatives
and the Underwriters pursuant to Sections 4 and 6 hereof, (b) any Underwriter to
the Company, or (c) any party hereto to any other party except that the
provisions of Section 1, Section 8 and Section 9 shall at all times be effective
and shall survive such termination.
Section 8. Indemnification.
---------------
(a) Indemnification of the Underwriters. 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 or
the Exchange Act against any loss, claim, damage, liability or expense
whatsoever, as incurred, to which such
-23-
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), 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 or Rule 434 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) upon the
violation of any applicable laws or regulations of foreign jurisdictions where
Reserved Securities have been offered to eligible employees and persons having
business relationships with the Company; or (iv) upon the aggregate amount paid
in settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim whatsoever
based upon any violation of the nature referred to in Section 8(a)(iii) hereof;
provided that (subject to Section 8(e) below) any such settlement is effected
with the written consent of the Company; or (v) upon the investigation,
preparation or defense against (including the fees and disbursements of counsel
chosen by Banc of America) any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such alleged
untrue statement or omission or in connection with any violation of law, to the
extent that any such expense is not paid under (i), (ii), (iii) or (iv) above;
or (vi) in whole or in part upon any inaccuracy in the representations and
warranties of the Company contained herein; or (vii) in whole or in part upon
any failure of the Company to perform its obligations hereunder or under law; or
(viii) upon any act or failure to act or any alleged act or failure to act by
any Underwriter or any person controlling such Underwriter within the meaning of
the Securities Act or the Exchange Act in connection with, or relating in any
manner to, the Common Stock 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) or (ii)
above (provided that the Company shall not be liable under this clause (viii) 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 or such controlling person through its bad faith or willful
misconduct), and the Company agrees to reimburse each Underwriter and each such
controlling person for any and all expenses (including the fees and
disbursements of counsel chosen by Banc of America) 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
-24-
to the extent, but only to the extent, arising out of or 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 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 Common Shares, or any person controlling such
Underwriter, if the Company identified the untrue statement or omission in
writing to the Underwriters and 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, at or prior to the
written confirmation of the sale of the Common Shares to such person, and if the
Prospectus (as so amended or supplemented) would have cured the defect giving
rise to such loss, claim, damage, liability or expense. The indemnity agreement
set forth in this Section 8(a) shall be in addition to any liabilities that the
Company may otherwise have.
(b) Indemnification of the Company, its Directors and Officers. 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 and each person, if any, who controls the Company 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 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 by the
Representatives expressly for use therein; and to reimburse the Company, or any
such director, officer or controlling person for any legal and other expense
reasonably incurred by the Company, or any such director, officer or controlling
person in connection with investigating, defending, settling, compromising or
paying any such loss, claim, damage, liability, expense or action. The Company
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
-25-
statements set forth in the table after the first paragraph and in the second
(insofar as it relates to concessions and reallowances), seventh, ninth, tenth,
eleventh (solely with respect to the second and third sentences thereof) and
twelfth paragraphs under the caption "Underwriting" in the Prospectus, and the
Underwriters confirm that such statements are correct. The indemnity agreement
set forth in this Section 8(b) shall be in addition to any liabilities that each
Underwriter may otherwise have.
(c) Notifications and other Indemnification Procedures. Promptly after
--------------------------------------------------
receipt by an indemnified party under this Section 8 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 8, 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 8 or to the extent it is not
materially prejudiced as a proximate result of such failure. In case any such
action is brought against any indemnified party and such indemnified party seeks
or intends to seek indemnity from an indemnifying party, the indemnifying party
will be entitled to participate in, and, to the extent that it 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 8 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 (Banc of America in the case of Section 8(b) and Section 9),
representing the indemnified parties who are parties to such action) or (ii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of commencement of the action, in each of which cases the fees
and expenses of counsel employed by the indemnified party shall be at the
expense of the indemnifying party.
-26-
(d) Settlements. The indemnifying party under this Section 8 shall not be
-----------
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
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 as contemplated by Section 8(c) hereof, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding contemplated
by Section 8(a) effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 8 or Section 9 hereof (whether or not the indemnified parties
are actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified party from all
liability arising out of such litigation, investigation, proceeding or claim 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) Indemnification for Reserved Securities. In connection with the offer
---------------------------------------
and sale of the Reserved Securities, the Company agrees, promptly upon a request
in writing, to indemnify and hold harmless the Underwriters from and against any
and all losses, liabilities, claims, damages and expenses incurred by them as a
result of the failure of eligible employees and persons having business
relationships with the Company to pay for and accept delivery of Reserved
Securities which, by the end of the first business day following the date of
this Agreement, were subject to a properly confirmed agreement to purchase.
Section 9. Contribution. If the indemnification provided for in Section 8 is
------------
for any reason held to be unavailable to or otherwise insufficient to hold
harmless an indemnified party in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount paid or payable by such indemnified party, as
incurred, as a result of any losses, claims, damages, liabilities or expenses
referred to therein (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company, on the one hand, and the
Underwriters, on the other hand, from the offering of the Common Shares pursuant
to this Agreement or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company, on the one hand, and the Underwriters, on the other hand,
in connection with the statements or omissions or inaccuracies in the
representations and warranties herein which resulted in such losses, claims,
damages, liabilities or expenses, as
-27-
well as any other relevant equitable considerations. The relative benefits
received by the Company, on the one hand, and the Underwriters, on the other
hand, in connection with the offering of the Common Shares pursuant to this
Agreement shall be deemed to be in the same respective proportions as the total
net proceeds from the offering of the Common Shares pursuant to this Agreement
(before deducting expenses) received by the Company, and the total underwriting
discount received by the Underwriters, in each case as set forth on the front
cover page of the Prospectus (or, if Rule 434 under the Securities Act is used,
the corresponding location on the Term Sheet) bear to the aggregate initial
public offering price of the Common Shares as set forth on such cover. The
relative fault of the Company, on the one hand, and the Underwriters, on the
other hand, shall be determined by reference to, among other things, whether any
such untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact or any such inaccurate or alleged
inaccurate representation or warranty relates to information supplied by the
Company, on the one hand, or the Underwriters, on the other hand, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission or any violation of the nature
referred to in Section 8(a)(iii).
The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to include,
subject to the limitations set forth in Section 8(c), any legal or other fees or
expenses reasonably incurred by such party in connection with investigating or
defending any action or claim. The provisions set forth in Section 8(c) with
respect to notice of commencement of any action shall apply if a claim for
contribution is to be made under this Section 9; provided, however, that no
additional notice shall be required with respect to any action for which notice
has been given under Section 8(c) for purposes of indemnification.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 9 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 in this Section 9.
Notwithstanding the provisions of this section 9, no Underwriter shall be
required to contribute any amount in excess of the amount by which the
underwriting commissions received by such Underwriter in connection with the
Common Shares underwritten by it and distributed to the public exceeds the
amount of any damages which such Underwriter has otherwise been required to pay
pursuant to Section 8 or Section 9. 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 to contribute
pursuant to this Section 9 are several, and not joint, in proportion to their
respective underwriting commitments as set forth opposite their names in
Schedule A. For purposes of this Section 9, each officer and employee of an
Underwriter and each person, if any, who controls an Underwriter within the
meaning of the Securities Act or the Exchange Act shall have the same rights to
contribution as such
-28-
Underwriter, and each director of the Company, each officer of the Company who
signed the Registration Statement, and each person, if any, who controls the
Company with the meaning of the Securities Act or the Exchange Act shall have
the same rights to contribution as the Company.
Section 10. DEFAULT OF ONE OR MORE OF THE SEVERAL UNDERWRITERS. If, on the First
--------------------------------------------------
Closing Date or the Second Closing Date, as the case may be, any one or more of
the several Underwriters shall fail or refuse to purchase Common Shares that it
or they have agreed to purchase hereunder on such date, and the aggregate number
of Common Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase does not exceed 10% of the aggregate number of the
Common Shares to be purchased on such date, the other Underwriters shall be
obligated, severally and not jointly, in the proportions that the number of Firm
Common Shares set forth opposite their respective names on Schedule A bears to
the aggregate number of Firm Common Shares set forth opposite the names of all
such non-defaulting Underwriters, or in such other proportions as may be
specified by the Representatives with the consent of the non-defaulting
Underwriters, to purchase the Common Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date. If, on the
First Closing Date or the Second Closing Date, as the case may be, any one or
more of the Underwriters shall fail or refuse to purchase Common Shares and the
aggregate number of Common Shares with respect to which such default occurs
exceeds 10% of the aggregate number of Common Shares to be purchased on such
date, and arrangements satisfactory to the Representatives and the Company for
the purchase of such Common Shares are not made within 48 hours after such
default, this Agreement shall terminate without liability of any party to any
other party except that the provisions of Section 1, Section 4, Section 8 and
Section 9 shall at all times be effective and shall survive such termination. In
any such case either the Representatives or the Company shall have the right to
postpone the First Closing Date or the Second Closing Date, as the case may be,
but in no event for longer than seven days in order that the required changes,
if any, to the Registration Statement and the Prospectus or any other documents
or arrangements may be effected.
As used in this Agreement, the term "Underwriter" shall be deemed to
-----------
include any person substituted for a defaulting Underwriter under this Section
10. Any action taken under this Section 10 shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
Section 11. TERMINATION OF THIS AGREEMENT. Prior to the First Closing Date this
-----------------------------
Agreement may be terminated by the Representatives by notice given to the
Company if at any time (i) trading or quotation in any of the Company's
securities shall have been suspended or limited by the Commission or by the
Nasdaq Stock Market, 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, the NASD or any other
governmental
-29-
authority; (ii) a general banking moratorium shall have been declared by any
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 substantial 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 to market the Common Shares in
the manner and on the terms described 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. Any termination
pursuant to this Section 11 shall be without liability on the part of (a) the
Company to any Underwriter, except that the Company shall be obligated to
reimburse the expenses of the Representatives and the Underwriters pursuant to
Section 4 and Section 6 hereof, (b) any Underwriter to the Company, or (c) of
any party hereto to any other party except that the provisions of Section 1,
Section 8 and Section 9 shall at all times be effective and shall survive such
termination.
Section 12. Representations and Indemnities to Survive Delivery. The respective
---------------------------------------------------
indemnities, agreements, representations, warranties and other statements of the
Company (including its subsidiaries), of its officers and of the several
Underwriters set forth in or made pursuant to this Agreement will remain in full
force and effect, regardless of any investigation 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, as the case may be, and will survive
delivery of and payment for the Common Shares sold hereunder and any termination
of this Agreement.
Section 13. Default by the Company. If the Company shall fail on the First
----------------------
Closing Date to sell the number of Common Shares that it is obligated to sell
hereunder, then this Agreement shall terminate without any liability on the part
of any nondefaulting party; provided, however, that the provisions of Sections
-------- -------
1, 4, 8, 9 and 12 shall remain in full force and effect. No action taken
pursuant to this Section 13 shall relieve the Company from liability, if any, in
respect of such default.
Section 14. Notices. All communications hereunder shall be in writing and shall
-------
be mailed, hand delivered or telecopied and confirmed to the parties hereto as
follows:
If to the Representatives:
Banc of America Securities LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
-30-
Attention: ▇▇▇ ▇▇▇▇▇▇
with copies to:
Banc of America Securities LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇, Esq.
and copies to:
Ropes & ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
If to the Company:
Therma-Wave, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
Section 15. SUCCESSORS. This Agreement will inure to the benefit of and be
----------
binding upon the parties hereto, including any substitute Underwriters pursuant
to Section 10 hereof, and to the benefit of the employees, officers and
directors and controlling persons referred to in Section 8 and Section 9, and in
each case their respective successors, and no other person will have any right
or obligation hereunder.
The term "successors" shall not include any purchaser of the Common Shares
----------
as such from any of the Underwriters merely by reason of such purchase.
-31-
Section 16. Partial Unenforceability. The invalidity or unenforceability of
------------------------
any Section, paragraph or provision of this Agreement shall not affect the
validity or enforceability of any other Section, paragraph or provision hereof.
If any Section, paragraph or provision of this Agreement is for any reason
determined to be invalid or unenforceable, there shall be deemed to be made such
minor changes (and only such minor changes) as are necessary to make it valid
and enforceable.
Section 17. 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.
(c) Waiver of Immunity. With respect to any Related Proceeding, each
------------------
party irrevocably waives, to the fullest extent permitted by applicable law, all
immunity (whether on the basis of sovereignty or otherwise) from jurisdiction,
service of process, attachment (both before and after judgment) and execution to
which it might otherwise be entitled in the Specified Courts, and with respect
to any Related Judgment, each party waives any such immunity in the Specified
Courts or any other court of competent jurisdiction, and will not raise or claim
or cause to be pleaded any such immunity at or in respect of any such Related
Proceeding or Related Judgment, including, without limitation, any immunity
pursuant to the United States Foreign Sovereign Immunities Act of 1976, as
amended.
Section 18. 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
-32-
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. The Table of Contents and the Section headings
herein are for the convenience of the parties only and shall not affect the
construction or interpretation of this Agreement.
Each of the parties hereto acknowledges that it is a sophisticated business
person who was adequately represented by counsel during negotiations regarding
the provisions hereof, including, without limitation, the indemnification
provisions of Section 8 and the contribution provisions of Section 9, and is
fully informed regarding said provisions. Each of the parties hereto further
acknowledges that the provisions of Sections 8 and 9 hereto fairly allocate the
risks in light of the ability of the parties to investigate the Company, its
affairs and its business in order to assure that adequate disclosure has been
made in the Registration Statement, any preliminary prospectus and the
Prospectus (and any amendments and supplements thereto), as required by the
Securities Act and the Exchange Act.
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to the Company the enclosed copies hereof, whereupon this
instrument, along with all counterparts hereof, shall become a binding agreement
in accordance with its terms.
Very truly yours,
THERMA-WAVE, INC.
By: ___________________________
Name:
Title:
-33-
The foregoing Underwriting Agreement is hereby confirmed and accepted by
the Representatives in San Francisco, California as of the date first above
written.
BANC OF AMERICA SECURITIES LLC
▇▇▇▇▇▇ BROTHERS INC.
Acting as Representatives of the
several Underwriters named in
the attached Schedule A.
By: BANC OF AMERICA SECURITIES LLC
By: ___________________________
Name:
Title:
SCHEDULE A
Schedule of Underwriters
Number of Firm
Common Shares
Underwriter to be Purchased
Banc of America Securities LLC.......................
▇▇▇▇▇▇ Brothers Inc..................................
_____________
TOTAL UNDERWRITERS (__)
SCHEDULE B
Schedule of Patents and Trademarks
SCHEDULE C
Schedule of Persons and Entities
Subject to Lock-up
G. ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇.
▇▇▇▇▇ Fargo Bank, as Trustee
FBO G. ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇., Acct. #503405
▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇
L. ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇. ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
W. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Antares International Partners, Inc.
▇▇▇▇ Capital Fund V, ▇.▇.
▇▇▇▇ Capital Fund V-B, L.P.
BCIP Associates
BCIP Trust Associates, ▇.▇.
▇▇▇▇▇▇▇▇ Street Partners
▇▇▇▇▇▇ ▇▇▇▇ Ventures, ▇.▇.
▇▇▇▇▇▇ Hill Associates, L.P.
Shimadzu Corporation
Toray Industries, Inc.
EXHIBIT A
Form of Opinion of
Counsel for the Company
The final opinion in draft form should be attached as Exhibit A at the
time this Agreement is executed.
Opinion of counsel for the Company to be delivered pursuant to Section
5(d) of the Underwriting Agreement.
References to the Prospectus in this Exhibit A include any supplements
thereto at the First Closing Date and the Second Closing Date.
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware.
(ii) The authorized, issued and outstanding capital stock of the
Company (including the Common Stock) conform to the descriptions thereof set
forth in the Registration Statement and the Prospectus. All of the outstanding
shares of Common Stock have been duly authorized and validly issued, are fully
paid and nonassessable and, to the best of such counsel's knowledge, have been
issued in compliance with the registration and qualification requirements of
federal and state securities laws. The form of certificate used to evidence the
Common Stock is in due and proper form and complies with all applicable
requirements of the charter and by-laws of the Company and the General
Corporation Law of the State of Delaware. The description of the Company's stock
option, stock bonus and other stock plans or arrangements, and the options or
other rights granted and exercised thereunder, set forth in the Prospectus
accurately and fairly presents the information required to be shown with respect
to such plans, arrangements, options and rights.
(iii) The Underwriting Agreement has been duly authorized, executed
and delivered by the Company and is enforceable against the Company in
accordance with the terms thereof.
(iv) The Common Shares to be purchased by the Underwriters from the
Company have been duly authorized for issuance and sale pursuant to the
Underwriting Agreement and, when issued and delivered by the Company pursuant to
the underwriting Agreement against payment of the consideration set forth
therein, will be validly issued, fully paid and nonassessable and, to the
knowledge of such counsel, the issuance of the Common Shares by the Company is
not subject to any preemptive or similar rights.
(v) Each of the Registration Statement and the Rule 462(b)
Registration Statement, if any, has been declared effective by the Commission
under the Securities Act. To the knowledge of such counsel, no stop order
suspending the effectiveness of either of the Registration Statement or the Rule
462(b) Registration Statement, if any, has been issued under the Securities Act
and no proceedings for such purpose have been instituted or are pending or are
contemplated or threatened by the Commission. Any required filing of the
Prospectus and
any supplement thereto pursuant to Rule 424(b) under the Securities Act has been
made in the manner and within the time period required by such Rule 424(b).
(vi) The Registration Statement, including any Rule 462(b)
Registration Statement, the Prospectus, and each amendment or supplement to the
Registration Statement and the Prospectus, as of their respective effective or
issue dates (other than the financial statements and supporting schedules
included therein or in exhibits to or excluded from the Registration Statement,
as to which no opinion need be rendered) comply as to form in all material
respects with the applicable requirements of the Securities Act.
(vii) The Common Shares have been approved for listing on the Nasdaq
National Market.
(viii) The statements (i) in the Prospectus under the captions "Risk
Factors--Certain provisions of our charter documents and Delaware law. . .",
"The Reclassification", "Management's Discussion and Analysis and Results of
Operations--Liquidity and Capital Resources", "Business--Legal Proceedings",
"Business--Patents and Proprietary Rights", "Management--Employment Agreements",
"Management--Stock Plans", "Management--Employee Stock Purchase Plan", "Certain
Relationships and Related Transactions", "Description of Capital Stock",
"Description of Certain Indebtedness", "Shares Eligible for Future Sale" and
"Underwriting" and (ii) in Item 14 and Item 15 of the Registration Statement,
insofar as such statements constitute matters of law, summaries of legal
matters, the Company's charter or by-law provisions, documents or legal
proceedings, or legal conclusions, has been reviewed by such counsel and fairly
present and summarize, in all material respects, the matters referred to
therein.
(ix) To the knowledge of such counsel, there are no legal or
governmental actions, suits or proceedings pending or overtly threatened which
are required to be disclosed in the Registration Statement, other than those
disclosed therein.
(x) To the best knowledge of such counsel, there are no Existing
Instruments required to be described or referred to in the Registration
Statement or to be filed as exhibits thereto other than those described or
referred to therein or filed or incorporated by reference as exhibits thereto;
and the descriptions thereof and references thereto are correct in all material
respects.
(xi) No consent, approval, authorization or other order of, or
registration or filing with, any court or other governmental authority or
agency, is required for the Company's execution, delivery and performance of the
Underwriting Agreement and consummation of the transactions contemplated thereby
and by the Prospectus, except as required under the Securities Act, applicable
state securities or blue sky laws and from the NASD.
(xii) The execution and delivery of the Underwriting Agreement by the
Company and the performance by the Company of its obligations thereunder (i)
have been duly authorized by all necessary corporate action on the part of the
Company; (ii) will not result in any violation of the provisions of the charter
or by-laws of the Company or any subsidiary; (iii) will not constitute a breach
of, or Default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company pursuant to any
Existing Instrument filed as an exhibit to the Registration Statement; or (iv)
to the knowledge of such counsel and other than performance by the Company of
its obligations under the indemnification section of the Underwriting Agreement,
as to which no opinion need be rendered, will not result in any violation of any
law, administrative regulation or administrative or court decree applicable to
the Company or any subsidiary.
(xiii) The Company is not, and after receipt of payment for the sale
of the Common Shares and the application of the net proceeds thereof, will not
be, an "investment company" within the meaning of Investment Company Act.
(xiv) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under the Underwriting
Agreement.
(xv) The Company is duly qualified as a foreign corporation to
transact business and is in good standing in the State of California and each
jurisdiction in which such qualification is required by reason of the ownership
or leasing of property, except for such jurisdictions (other than the State of
California) where the failure to so qualify or to be in good standing would not,
individually or in the aggregate, result in a Material Adverse Change.
(xvi) Each significant subsidiary incorporated in the United States
(as defined in Rule 405 under the Securities Act) has been duly incorporated and
is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and authority to own,
lease and operate its properties and to conduct its business as described in the
Prospectus and, to the best knowledge of such counsel, is duly qualified as a
foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property, except for such jurisdictions where the
failure to so qualify or to be in good standing would not, individually or in
the aggregate, result in a Material Adverse Change.
(xvii) All of the issued and outstanding capital stock of each such
significant subsidiary has been duly authorized and validly issued, is fully
paid and non-assessable and is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge, lien,
encumbrance or, to the best knowledge of such counsel, any pending or threatened
claim.
(xviii) No stockholder of the Company or any other person has any
preemptive right, right of first refusal or other similar right to subscribe for
or purchase securities of the Company arising (i) by operation of the charter or
by-laws of the Company or (ii) to the best knowledge of such counsel, otherwise.
(xix) Except as disclosed in the Prospectus under the caption "Shares
Eligible for Future Sale", to the knowledge of such counsel, 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 the Underwriting Agreement, except for such rights
as have been duly waived.
(xx) To the best knowledge of such counsel, neither the Company nor
any subsidiary is in violation of its charter or by-laws or any law,
administrative regulation or administrative or court decree applicable to the
Company or any subsidiary or is in Default in the performance or observance of
any obligation, agreement, covenant or condition contained in any material
Existing Instrument, except in each such case for such violations or Defaults as
would not, individually or in the aggregate, result in a Material Adverse
Change.
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Company,
representatives of the independent public or certified public accountants for
the Company and with representatives of the Underwriters at which the contents
of the Registration Statement and the Prospectus, and any supplements or
amendments thereto, and related matters were discussed and, although such
counsel is not passing upon and does not assume any responsibility for the
accuracy, completeness or fairness of the 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 their attention which would lead them to believe that either the
Registration Statement or any amendments thereto, at the time the Registration
Statement or such amendments became effective, contained an 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 that the
Prospectus, as of its date or at the First Closing Date or the Second Closing
Date, as the case may be, 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, not
misleading (it being understood that such counsel need express no belief as to
the financial statements or schedules or other financial or statistical data
derived therefrom, included in the Registration Statement or the Prospectus or
any amendments or supplements thereto).
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the General
Corporation Law of the State of Delaware or the federal law of the United
States, to the extent they deem proper and specified in such opinion, upon the
opinion (which shall be dated the First Closing Date or the Second Closing Date,
as the case may be, shall be satisfactory in form and substance to the
Underwriters, shall expressly state that the Underwriters may rely on such
opinion as if it were addressed to them and shall be furnished to the
Representatives) of other counsel of good standing whom they believe to be
reliable and who are satisfactory to counsel for the Underwriters; provided,
however, that such counsel shall further state that they believe that they and
the Underwriters are justified in relying upon such opinion of other counsel,
and (B) as to matters of fact, to the extent they deem proper, on certificates
of responsible officers of the Company and public officials.
EXHIBIT B
Form of Opinion of Intellectual
Property Counsel for the Company
The final opinion in draft form should be attached as Exhibit B at the time
this Agreement is executed.
Opinion of counsel for the Company to be delivered pursuant to Section 5(d)
of the Underwriting Agreement.
References to the Prospectus in this Exhibit B include any supplements
thereto at the Closing Date.
[Letterhead]
_____________, 1999
Banc of America Securities LLC
▇▇▇▇▇▇ Brothers Inc.
As Representatives of the several Underwriters
named in Schedule A to the Underwriting
Agreement referred to below
c/o Banc of America Securities LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
At the request of Therma-Wave, Inc., a Delaware corporation (the
"Company"), for which we act as patent and trademark counsel, we are rendering
the opinions set forth below.
This opinion is being furnished pursuant to section 5(d) of the
Underwriting Agreement, dated __________, 1999, (the "Underwriting Agreement")
among Banc of America Securities LLC, on behalf of the Representatives and the
several underwriters named in Schedule A thereto (the "Underwriters"), and the
Company providing for the sale to you by the Company of __________ shares of
common stock, par value $0.01 per share, of the Company (the "Common Stock").
In connection with this opinion, we have examined signed copies of the
registration statement of the Company on Form S-1 (No. 333-76019), filed by the
Company under the Securities Act of 1933, as amended (the "Securities Act"),
with Securities and Exchange Commission (the "Commission") on April 9, 1999,
Amendment No. 1 thereto, including all exhibits filed therewith, filed with the
Commission on May 19, 1999, Amendment No. 2 thereto, including all exhibits
filed therewith, filed with the Commission on June 14, 1999, and Amendment No. 3
thereto, including all exhibits filed therewith, filed with the Commission on
___________ __, 1999 (the registration statement as amended at the time when it
became effective, including the information deemed to be part thereof at the
time of effectiveness pursuant to Rule 430A of the rules and regulations of the
Commission under the Securities Act, being hereinafter referred to as the
"Registration Statement"), the Preliminary Prospectus dated __________, 1999 and
the final Prospectus dated __________, 1999 (in the form in which it was filed
pursuant to Rule 424(b) of the Commission under the Securities Act, being
hereinafter referred to as the 'Prospectus"), an executed copy of the
Underwriting Agreement, and copies of patent applications filed on behalf of the
Company or any of its subsidiaries. In addition, we have reviewed such other
documents and certificates as we deemed relevant and necessary as a basis for
the opinions hereinafter expressed.
We are familiar with the technology used by the Company in its business and
have read the portions of the Registration Statement and the Prospectus headed:
"Risk Factors - Reliance on Patents and Other Intellectual Property," "Business
- Patents and Proprietary Rights" and "Business - Legal Proceedings"
(collectively, the "Technology Portion"). Based upon the foregoing and subject
to the assumptions, exceptions and qualifications set forth herein, we are of
the opinion that:
1. To the best of our knowledge, neither the Registration Statement nor
the Prospectus (A) contains any untrue statement of a material fact with respect
to trademarks, trade names, patents, patent applications, mask works,
copyrights, licenses, trade secrets or other intellectual property rights owned
or used by the Company, or the manner of its use thereof, or any allegation on
the part of any person or entity that the Company is infringing any trademarks,
trade names, patents, patent applications, mask works, copyrights, licenses,
trade secrets or other intellectual property rights of any such person or
entity, or (B) omits to state a material fact relating to trademarks, trade
names, patents, patent applications, mask works, copyrights, licenses, trade
secrets or other intellectual property rights owned or used by the Company, or
the manner of its use thereof, or any allegations of which we have knowledge,
that is required to be stated in the Registration Statement or the Prospectus or
is necessary to make the statements therein not misleading.
2. We have no knowledge of any facts which would preclude the Company from
having clear title to its patents or patent applications referenced in the
Technology Portion of the Prospectus. To the best of our knowledge, the Company
owns or possesses sufficient licenses or other rights to use all trademarks,
trade names, patents, copyrights, licenses, trade secrets, know-how and other
intellectual property necessary to conduct the business now conducted or
proposed to be conducted by the Company as described in the Prospectus.
3. To the best of our knowledge, the Company is not infringing or
otherwise violating and has not infringed or otherwise violated any trademarks,
trade names, patents, patent applications, mask works, copyrights, licenses,
trade secrets or other intellectual property rights of others, and, except as
described in the Technology Portion of the Prospectus, has not received any
notice of infringement or conflict with asserted rights of
others with respect to any patents, patent applications, trademarks, trade
names, mask works, copyrights, licenses, trade secrets, or other intellectual
property rights which could result in any material adverse effect upon the
Company. To the best of our knowledge, there are no infringements by others of
any of the Company's trademarks, trade names, patents, patent applications, mask
works, copyrights, licenses, trade secrets or other intellectual property
rights.
4. To the best of our knowledge, there are no legal or governmental
proceedings pending relating to trademarks, trade names, patents, patent
applications, mask works, copyrights, licenses, trade secrets or other
intellectual property rights which could result in any material adverse effect
upon the Company other than as described in the Technology Portion of the
Prospectus and the prosecution by the Company of its patent applications before
the United States Patent and Trademark Office and appropriate foreign government
agencies, and to the best of our knowledge no such proceedings are threatened or
contemplated by governmental authorities or others.
5. The statements in the Technology Portion of the Prospectus, insofar as
such statements constitute a summary of documents referred to therein or matters
of law (other than the statements therein concerning the Company's government
contracts and grants, as to which we express no opinion), are accurate summaries
and fairly and correctly present, in all material respects, the information
called for with respect to such documents and matters.
6. The Company duly and properly holds the patents and trademarks/service
marks, and has duly and properly filed the United States patent and/or
trademark/service ▇▇▇▇ applications and patent cooperation treaty applications
listed or otherwise referenced in the Technology Portion of the Prospectus.
7. We do not know of any contract or other document relating to the
Company's intellectual property of a character required to be filed as an
exhibit to the Registration Statement or required to be described in the
Registration Statement or the Prospectus that has not been filed or described as
required.
Very truly yours,
EXHIBIT C
Form of Lock-Up Agreement
____________, 1999
Banc of America Securities LLC
▇▇▇▇▇▇ Brothers Inc.
As Representatives of the several Underwriters
c/o Banc of America Securities LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Therma-Wave, Inc. (the "Company")
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Ladies & Gentlemen:
The undersigned is an owner of record or beneficially of certain shares of
Common Stock of the Company ("Common Stock") or securities convertible into or
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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
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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, without the prior written consent of Banc of America
Securities LLC (which consent may be withheld in its sole discretion), directly
or indirectly, sell, offer, contract or grant any option to sell (including
without limitation any short sale), pledge, transfer, establish an open "put
equivalent position" within the meaning of Rule 16a-l(h) under the Securities
Exchange Act of 1934, or otherwise dispose of any shares of Common Stock,
options or warrants to acquire shares of Common Stock, or securities
exchangeable or exercisable for or convertible into shares of Common Stock
currently or hereafter owned either of record or beneficially (as defined in
Rule 13d-3 under Securities Exchange Act of 1934, as amended) by the
undersigned, or publicly announce the undersigned's intention to do any of the
foregoing, for a period commencing on the date hereof and continuing through the
close of trading on the date 180 days after the date of the Prospectus. The
foregoing sentence shall not apply to a distribution to partners or shareholders
of the undersigned, provided that such distribution shall be conditioned upon
such distributees executing and delivering an executed lock-up agreement, in the
form of this agreement, to Banc of America Securities LLC prior to the
commencement of any such distribution. 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 convertible into or exchangeable or exercisable for
Common Stock 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 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.
By: ____________________________
______________________________________
Printed Name of Person Signing (and
indicate capacity of person signing if
signing as custodian, trustee, or on
behalf of an entity)