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EXHIBIT 1.1
EFTC Corporation
4,000,000 Shares(a)
Common Stock
($0.01 par value)
Underwriting Agreement
New York, New York
November _____, 1997
Salomon Brothers Inc
▇.▇. ▇▇▇▇▇▇▇▇ & Co.
Pacific Crest Securities Inc.
As Representatives of the several Underwriters,
c/o Salomon Brothers Inc
Seven ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
EFTC Corporation, a Colorado corporation (the "Company"),
proposes to sell to the underwriters named in Schedule I hereto (the
"Underwriters"), for whom you (the "Representatives") are acting as
representatives, 3,500,000 shares of Common Stock, $0.01 par value ("Common
Stock"), of the Company, and the persons named in Schedule II hereto (the
"Selling Shareholders") propose to sell to the Underwriters 500,000 shares of
Common Stock (said shares to be issued and sold by the Company and shares to be
sold by the Selling Shareholders collectively being hereinafter called the
"Underwritten Securities"). The Company and the Selling Shareholders named in
Schedule III hereto also propose to grant to the Underwriters an option to
purchase up to 600,000 additional shares of Common Stock (the "Option
Securities"; the Option Securities, together with the Underwritten Securities,
being hereinafter called the "Securities"). To the extent there are no
additional Underwriters listed on Schedule I other than you, the term
Representatives as used herein shall mean you, as Underwriters, and the terms
Representatives and Underwriters shall mean either the singular or plural as
the context requires. Any reference herein to the Registration Statement, a
Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to Item 12 of
Form S-2 which were filed under the Exchange Act.
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(a) Plus an option to purchase from EFTC Corporation and the
persons named in Schedule III hereto up to 600,000 additional shares to cover
over-allotments.
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It is understood that a form of prospectus is to be used in
connection with the offering and sale of the Securities to United States and
Canadian Persons (as defined herein) which, for purposes of distribution to
Canadian Persons, shall have a Canadian "wrap-around" (the "Canadian Offering
Memorandum"). Insofar as they relate to offers or sales of Securities in
Canada, all references herein to the Preliminary Prospectus and the Prospectus
shall include the Canadian Offering Memorandum.
I. Representations and Warranties.
A. The Company and the Joint Selling Shareholders jointly and
severally represent and warrant to, and agree with, each Underwriter
as set forth below in this Section I. Certain terms used in this
Section I are defined in Section XVII hereof.
1. The Company meets the requirements for use of
Form S-2 under the Act and has filed with the Securities
and Exchange Commission (the "Commission") a registration
statement (file number 333-38433) on such Form, including a
related preliminary prospectus, for the registration under
the Act of the offering and sale of the Securities. The
Company may have filed one or more amendments thereto,
including a related preliminary prospectus, each of which
has previously been furnished to you. The Company will
next file with the Commission either (A) prior to the
Effective Date of such registration statement, a further
amendment to such registration statement (including the
form of final prospectus) or (B) after the Effective Date
of such registration statement, a final prospectus in
accordance with Rules 430A and 424(b)(1) or (4). In the
case of clause (B), the Company has included in such
registration statement, as amended at the Effective Date,
all information (other than Rule 430A Information) required
by the Act and the rules thereunder to be included in such
registration statement and the Prospectus. As filed, such
amendment and form of final prospectus, or such final
prospectus, shall contain all Rule 430A Information,
together with all other such required information, and,
except to the extent the Representatives shall agree in
writing to a modification, shall be in all substantive
respects in the form furnished to you prior to the
Execution Time or, to the extent not completed at the
Execution Time, shall contain only such specific additional
information and other changes (beyond that contained in the
latest Preliminary Prospectus) as the Company has advised
you, prior to the Execution Time, will be included or made
therein.
2. On the Effective Date, the Registration
Statement did or will, and when the Prospectus is first
filed (if required) in accordance with Rule 424(b) and on
the Closing Date (as defined herein) and on any date on
which shares sold in respect of the Underwriters'
over-allotment option are purchased, if such date is not
the Closing Date (a "settlement date"), the Prospectus (and
any supplements thereto) will, comply in all material
respects with the applicable requirements of the Act and
the Exchange Act and the respective rules
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thereunder; on the Effective Date and at the Execution
Time, the Registration Statement did not or will not
contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or
necessary in order to make the statements therein not
misleading; and, on the Effective Date, the Prospectus, if
not filed pursuant to Rule 424(b), will not, and on the
date of any filing pursuant to Rule 424(b) and on the
Closing Date and any settlement date, the Prospectus
(together with any supplement thereto) will not, include
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; provided, however, that the
Company and the Joint Selling Shareholders make no
representations or warranties as to the information
contained in or omitted from the Registration Statement, or
the Prospectus (or any supplement thereto) in reliance upon
and in conformity with information furnished herein or in
writing to the Company by or on behalf of any Underwriter
through the Representatives specifically for inclusion in
the Registration Statement or the Prospectus (or any
supplement thereto).
3. The subsidiaries listed on Schedule IV hereto
are the only subsidiaries of the Company.
4. Each of the Company and its subsidiaries has
been duly organized and is validly existing as a
corporation or limited liability company, as the case may
be, in good standing under the laws of the jurisdiction in
which it is organized with full corporate power and
authority to own its properties and conduct its business as
described in the prospectus, and is duly qualified to do
business as a foreign corporation and is in good standing
under the laws of each jurisdiction which requires such
qualification.
5. All the outstanding shares of capital stock
of each subsidiary have been duly and validly authorized
and issued and are fully paid and nonassessable, and,
except as otherwise set forth in the Prospectus, all
outstanding shares of capital stock of the subsidiaries are
owned by the Company either directly or through wholly
owned subsidiaries free and clear of any security
interests, claims, liens or encumbrances.
6. The Company's authorized equity
capitalization is as set forth in the Prospectus; the
capital stock of the Company conforms in all material
respects to the description thereof contained in the
Prospectus; the outstanding shares of Common Stock have
been duly and validly authorized and issued and are fully
paid and nonassessable; the Securities being sold hereunder
have been duly and validly authorized, and, when issued and
delivered to and paid for by the Underwriters pursuant to
this Agreement, will be fully paid and nonassessable; the
Company has taken the actions required by the published
rules of the Nasdaq Stock Market to qualify the Securities
for inclusion in the ▇▇▇▇▇▇
▇
▇
▇▇▇▇▇ ▇▇▇▇▇▇; the certificates for the Securities are in
valid and sufficient form; the holders of outstanding
shares of capital stock of the Company are not entitled to
preemptive or other rights to subscribe for the Securities
and, except as set forth in the Prospectus, no options,
warrants or other rights to purchase, agreements or other
obligations to issue, or rights to convert any obligations
into or exchange any securities for, shares of capital
stock of or ownership interests in the Company are
outstanding.
7. There is no franchise, contract or other
document of a character required to be described in the
Registration Statement or Prospectus, or to be filed as an
exhibit thereto, which is not described or filed as
required; and the statements in each of (a) the Prospectus
under the headings "Risk Factors -- Protection of Know-how
and Trade Secrets; -- Environmental Compliance; -- Shares
Eligible for Future Sale; and -- Anti-Takeover Provisions"
and "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Recent
Developments", (b) the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1996, under the
headings "Item 1. Business -- Patents and Trademarks",
"Item 2. Description of Property" and "Item 3. Legal
Proceedings" and (c) the Company's Proxy Statement dated
April 29, 1997, under the heading "Certain Relationships
and Related Transactions", fairly summarize the matters
therein described.
8. This Agreement has been duly authorized,
executed and delivered by the Company and constitutes a
valid and binding obligation of the Company enforceable in
accordance with its terms.
9. The Company is not and, after giving effect
to the offering and sale of the Securities and the
application of the proceeds thereof as described in the
Prospectus, will not be an "investment company" as defined
in the Investment Company Act of 1940, as amended.
10. No consent, approval, authorization, filing
with or order of any court or governmental agency or body
is required in connection with the transactions
contemplated herein, except such as have been obtained
under the Act and such as may be required under the blue
sky laws of any jurisdiction in connection with the
purchase and distribution of the Securities by the
Underwriters in the manner contemplated herein and in the
Prospectus.
11. Neither the issue and sale of the Securities
nor the consummation of any other of the transactions
herein contemplated nor the fulfillment of the terms hereof
will conflict with, result in a breach or violation or
imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of its
subsidiaries pursuant to, (i) the charter or by-laws of the
Company or any of its subsidiaries, (ii) the terms of any
indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement,
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obligation, condition, covenant or instrument to which the
Company or any of its subsidiaries is a party or bound or
to which its or their property is subject or (iii) any
statute, law, rule, regulation, judgment, order or decree
applicable to the Company or any of its subsidiaries of any
court, regulatory body, administrative agency, governmental
body, arbitrator or other authority having jurisdiction
over the Company or any of its subsidiaries or any of its
or their properties.
12. No holders of securities of the Company have
rights to the registration of such securities under the
Registration Statement except for such rights of the
persons and entities listed on Schedule V hereto (the
"Registration Rights Shareholders") as have been
effectively waived.
13. The consolidated financial statements and
schedules of the Company and its consolidated subsidiaries
included in the Prospectus and the Registration Statement
present fairly in all material respects the financial
condition, results of operations and cash flows of the
Company as of the dates and for the periods indicated,
comply as to form with the applicable accounting
requirements of the Act, the Exchange Act and the
respective rules and regulations thereunder and have been
prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the
periods involved (except as otherwise noted therein). The
selected financial data set forth under the captions
"Selected Consolidated Historical and Pro Forma Financial
Data" and "Prospectus Summary -- Summary Consolidated
Historical and Pro Forma Financial Information" in the
Prospectus and the Registration Statement, fairly present,
on the basis stated in the Prospectus and the Registration
Statement the information included therein. The unaudited
pro forma financial statements included in or incorporated
by reference in the Prospectus and the Registration
Statement comply as to form in all material respects with
the requirements of the Act, the Exchange Act and the
respective rules and regulations thereunder; the pro forma
adjustments have been properly applied to the historical
amounts in the compilation of such pro forma statements;
the assumptions described in the notes to such pro forma
statements provide a reasonable basis for presenting the
significant direct effects of the transactions contemplated
therein and such pro forma adjustments give appropriate
effect to those adjustments, in each case, in accordance
with Regulation S-X.
14. No action, suit or proceeding by or before
any court or governmental agency, authority or body or any
arbitrator involving the Company or any of its subsidiaries
or its or their property is pending or, to the best
knowledge of the Company, threatened that (i) could
reasonably be expected to have a material adverse effect on
the performance of this Agreement or the consummation of
any of the transactions contemplated hereby or (ii) could
reasonably be expected to have a material adverse effect on
the condition (financial or
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otherwise), prospects, earnings, business or properties of
the Company and its subsidiaries, taken as a whole, whether
or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the
Prospectus (exclusive of any supplement thereto).
15. Each of the Company and each of its
subsidiaries, owns or leases all such properties as are
necessary to the conduct of its operations as presently
conducted; neither the Company nor any subsidiary is in
violation of any law, rule or regulation of any Federal,
state or local governmental or regulatory authority
applicable to it or is not in non-compliance with any term
or condition of, or has failed to obtain and maintain in
effect, any license, certificate, permit or other
governmental authorization required for the ownership or
lease of its property or the conduct of its business, which
violation, non-compliance or failure would individually or
in the aggregate have a material adverse effect on the
condition (financial or otherwise), prospects, earnings,
business or properties of the Company and its subsidiaries,
taken as a whole, whether or not arising from transactions
in the ordinary course of business, except as set forth in
or contemplated in the Prospectus (exclusive of any
supplement thereto); and the Company has not received
notice of any proceedings relating to the revocation or
material modification of any such license, certificate,
permit or other authorization.
16. Neither the Company nor any subsidiary is in
violation or default of (i) any provision of its charter or
bylaws, (ii) the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or
other agreement, obligation, condition, covenant or
instrument to which it is a party or bound or to which its
property is subject or (iii) any statute, law, rule,
regulation, judgment, order or decree of any court,
regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the
Company or such subsidiary or any of its properties, as
applicable, except any such violation or default which
would not, singly or in the aggregate, result in a material
adverse change in the condition (financial or otherwise),
prospects, earnings, business or properties of the Company
and its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the
Prospectus (exclusive of any supplement thereto).
17. KPMG Peat Marwick LLP and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
LLP, each of which has certified certain financial
statements of the Company or its subsidiaries and delivered
their report with respect to the audited consolidated
financial statements and schedules included in the
Prospectus, are independent public accountants with respect
to the Company within the meaning of the Act and the
applicable published rules and regulations thereunder.
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18. There are no transfer taxes or other similar
fees or charges under Federal law or the laws of any state,
or any political subdivision thereof, required to be paid
in connection with the execution and delivery of this
Agreement or the issuance by the Company, the sale by the
Company or the resale by the Joint Selling Shareholders of
the Securities.
19. The Company has filed all foreign, federal,
state and local tax returns that are required to be filed
or has requested extensions thereof (except in any case in
which the failure so to file would not have a material
adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company
and its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the
Prospectus (exclusive of any supplement thereto) and has
paid all taxes required to be paid by it and any other
assessment, fine or penalty levied against it, to the
extent that any of the foregoing is due and payable, except
for any such assessment, fine or penalty that is currently
being contested in good faith or as would not have a
material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of
the Company and its subsidiaries, taken as a whole, whether
or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the
Prospectus (exclusive of any supplement thereto).
20. No labor disturbance by or dispute with the
employees of the Company or any of its subsidiaries exists
or is threatened or imminent that could reasonably be
expected to have a material adverse change in the condition
(financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a
whole, whether or not arising from transactions in the
ordinary course of business, except as set forth in or
contemplated in the Prospectus (exclusive of any supplement
thereto).
21. The Company and each of its subsidiaries are
insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as are
prudent and customary in the businesses in which the
Company and its subsidiaries are engaged; neither the
Company nor any such subsidiary has been refused any
insurance coverage sought or applied for; and neither the
Company nor any such subsidiary has any reason to believe
that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary
to continue its business at a currently anticipated cost
that would not have a material adverse effect on the
condition (financial or otherwise), prospects, earnings,
business or properties of the Company and its subsidiaries,
taken as a whole, whether or not arising from transactions
in the ordinary course of business, except as set forth in
or contemplated in the Prospectus (exclusive of any
supplement thereto).
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22. No subsidiary of the Company is currently
prohibited, directly or indirectly, from paying any
dividends to the Company, from making any other
distribution on such subsidiary's capital stock, from
repaying to the Company any loans or advances to such
subsidiary from the Company or from transferring any of
such subsidiary's property or assets to the Company or any
other subsidiary of the Company, except as described in or
contemplated by the Prospectus (exclusive of any amendment
thereto).
23. Except as set forth in or contemplated in the
Prospectus (exclusive of any supplement thereto), the
Company and its subsidiaries (i) possess all certificates,
authorizations and permits issued by the appropriate
federal, state or foreign regulatory authorities necessary
to conduct their respective businesses, except where the
failure to possess such certificates, authorizations and
permits would not, singly or in the aggregate, result in a
material adverse change in the condition (financial or
otherwise), prospects, earnings, business or properties of
the Company and its subsidiaries, taken as a whole, whether
or not arising from transactions in the ordinary course of
business and (ii) have not received any notice of
proceedings relating to the revocation or modification of
any such certificate, authorization or permit which, singly
or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would result in a material
adverse change in the condition (financial or otherwise),
prospects, earnings, business or properties of the Company
and its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of
business.
24. The Company and each of its subsidiaries
maintain a system of internal accounting controls
sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's
general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting
principles and to maintain asset accountability; (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 the
existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
25. The Company owns or has obtained licenses or
other rights for the patents, patent applications, trade
and service marks, trade secrets and other intellectual
properties referenced or described in the Prospectus as
being owned or used by or licensed to it, including without
limitation the rights to the AES software (collectively,
the "Intellectual Property"). Except as set forth in the
Prospectus under the caption "Risk Factors -- Protection of
Know-how and Trade Secrets", (a) there are no rights of
third parties to any such Intellectual Property that would
materially impair the rights of the Company therein; (b) to
the Company's knowledge there is no material infringement
by
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third parties of any such Intellectual Property; (c) there
is no pending or to the Company's knowledge threatened
action, suit, proceeding or claim by others challenging the
Company's rights in or to any such Intellectual Property,
and the Company is unaware of any facts which would form a
reasonable basis for any such claim; (d) there is no
pending or to the Company's knowledge threatened action,
suit, proceeding or claim by others challenging the
validity or scope of any such Intellectual Property, and
the Company is unaware of any facts which would form a
reasonable basis for any such claim; (e) there is no
pending or to the Company's knowledge threatened action,
suit, proceeding or claim by others that the Company
infringes or otherwise violates any patent, trademark,
copyright, trade secret or other proprietary rights of
others, and the Company is unaware of any other fact which
would form a reasonable basis for any such claim; (f) there
is no U.S. patent or published U.S. patent application
which contains claims that dominate or may dominate any
Intellectual Property described in the Prospectus as being
owned or used by or licensed to the Company or that
interferes with the issued or pending claims of any such
Intellectual Property; and (g) there is no prior art of
which the Company is aware that may render any U.S. patent
held by the Company invalid or any U.S. patent application
held by the Company unpatentable which has not been
disclosed to the U.S. Patent and Trademark Office. The
Company and each of its subsidiaries owns the Intellectual
Property or has rights to use the Intellectual Property
that is necessary to conduct its business as described in
the Prospectus.
26. Except as disclosed in the Registered
Statement and the Prospectus, the Company (i) does not have
any material lending or other relationship with any bank
affiliate or lending affiliate of Salomon Brothers Inc,
▇.▇. ▇▇▇▇▇▇▇▇ & Co. or Pacific Crest Securities Inc., and
(ii) does not intend to use any of the proceeds from the
sale of the Securities hereunder to repay any outstanding
debt owed to any affiliate of any of the Underwriters.
27. The Indemnification Agreement, dated February
24, 1997, among ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇
▇▇▇▇▇▇▇▇ (collectively, the "Current Electronics
Indemnitors") and the Company, has been duly authorized,
executed and delivered by the Company, has been duly
executed and delivered by the Current Electronics
Indemnitors and constitutes a valid and binding obligation
of the Company and the Current Electronics Indemnitors
enforceable in accordance with its terms.
28. The Indemnification Agreement, dated
September 30, 1997, among ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇. Grantor
Retained Income Trust u/a/d 12/31/89, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
▇▇., ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇. Revocable
Living Trust and Circuit Test International Limited
Partnership, a Florida limited partnership (collectively,
the "Circuit Test Indemnitors"; and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Jr. and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, together, are the "Circuit Test
Individual Indemnitors") and the Company, has been duly
authorized, executed and delivered by the Company and the
Circuit Test Indemnitors (other than the Circuit Test
Individual Indemnitors), has been duly executed and
delivered by the Circuit Test Individual Indemnitors and
constitutes a valid and binding obligation of the Company
and the Circuit Test Indemnitors enforceable in accordance
with its terms.
Any certificate signed by any officer of the Company and
delivered to the Representatives or counsel for the Underwriters in connection
with the offering of the Securities shall be deemed a representation and
warranty by the Company, as to matters covered thereby, to each Underwriter.
B. Each Selling Shareholder represents and warrants to, and agrees
with, each Underwriter that:
1. Such Selling Shareholder is the lawful owner
of the Securities to be sold by such Selling Shareholder
hereunder and upon sale and delivery of, and payment for,
such Securities, as provided herein, such Selling
Shareholder will convey good and marketable title to such
Securities, free and clear of all liens, encumbrances,
equities and claims whatsoever.
2. Such Selling Shareholder has not taken and
will not take, directly or indirectly, any action designed
to or which has constituted or which might reasonably be
expected to cause or result, under the Exchange Act or
otherwise, in stabilization or manipulation of the price of
any security of the Company to facilitate the sale or
resale of the Securities and has not effected any sales of
shares of Common Stock which, if effected by the issuer,
would be required to be disclosed in response to Item 701
of Regulation S-K.
3. Certificates in negotiable form for such
Selling Shareholder's Securities (other than, in the case
of an Exercising Selling Shareholder, the Exercise
Securities) have been placed in custody (or, in the case of
Exercise Securities, will be placed in custody on the first
business day following the Execution Time), for delivery
pursuant to the terms of this Agreement, under a Custody
Agreement executed and delivered by such Selling
Shareholders, in the form heretofore furnished to you (the
"Custody Agreement") with American Securities Transfer &
Trust, Inc., as Custodian (the "Custodian"); the Securities
represented by the certificates so held in custody for each
Selling Shareholder (and the Exercise Securities
represented by the certificates that are required pursuant
to this Agreement to be held in custody for an Exercising
Selling Shareholder) are subject to the interests hereunder
of the Underwriters, the Company and the other Selling
Shareholders; the arrangements for custody and delivery of
such certificates (including certificates representing
Exercise Securities), made by such Selling Shareholder
hereunder and under the
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Custody Agreement, are not subject to termination or
modification by any acts of such Selling Shareholder, or by
operation of law, whether by the death or incapacity of
such Selling Shareholder or the occurrence of any other
event; and if any such death, incapacity or any other such
event shall occur before the delivery of such Securities
hereunder, certificates for the Securities will be
delivered by the Custodian in accordance with the terms and
conditions of this Agreement and the Custody Agreement as
if such death, incapacity or other event had not occurred,
regardless of whether or not the Custodian shall have
received notice of such death, incapacity or other event.
4. No consent, approval, authorization or order
of any court or governmental agency or body is required for
the consummation by such Selling Shareholder of the
transactions contemplated herein, except such as may have
been obtained under the Act and such as may be required
under the federal and provincial securities laws of Canada
or the blue sky laws of any jurisdiction in connection with
the purchase and distribution of the Securities by the
Underwriters and such other approvals as have been
obtained.
5. Neither the sale of the Securities being sold
by such Selling Shareholder nor the consummation of any
other of the transactions herein contemplated by such
Selling Shareholder or the fulfillment of the terms hereof
by such Selling Shareholder will conflict with, result in a
breach or violation of, or constitute a default under any
law or the terms of any indenture or other agreement or
instrument to which such Selling Shareholder is a party or
bound, or any judgment, order or decree applicable to such
Selling Shareholder of any court, regulatory body,
administrative agency, governmental body or arbitrator
having jurisdiction over such Selling Shareholder.
Any certificate signed by any Selling Shareholder or a
representative of a Selling Shareholder and delivered to the
Representatives or counsel for the Underwriters in connection with the
offering of the Securities shall be deemed a representation and
warranty by such Selling Shareholder, as to the matters covered
thereby, to each Underwriter.
C. Each Several Selling Shareholder represents and warrants to, and
agrees with, each Underwriter that such Several Selling Shareholder
has no reason to believe that the representations and warranties of
the Company and the Joint Selling Shareholders contained in Section
I.A. are not true and correct, is familiar with the Registration
Statement and has no knowledge of any material fact, condition or
information not disclosed in the Prospectus or any supplement thereto
which has adversely affected or may adversely affect the business of
the Company or any of its subsidiaries; and the sale of Securities by
such Several Selling Shareholder pursuant hereto is not prompted by
any information concerning the Company or any of its subsidiaries
which is not set forth in the Prospectus or any supplement thereto.
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D. Each Exercising Selling Shareholder represents and warrants to, and
agrees with, each Underwriter that it has delivered to the Company (i)
notice in the form attached hereto as Exhibit C of an irrevocable
election to exercise options for the purchase of the number of Common
Stock shown opposite its name on Schedule VII hereto and (ii)
irrevocable instructions to deliver the Exercise Securities to the
Custodian to be held by the Custodian pursuant to the Custody
Agreement; each such election and each such set of instructions is
irrevocable and is not subject to termination or modification by any
acts of such Exercising Selling Shareholder, or by operation of law,
whether by the death or incapacity of such Exercising Selling
Shareholder or the occurrence of any other event; and if any such
death, incapacity or any other such event shall occur before the
delivery of such Exercise Securities pursuant to such instructions,
certificates for the Exercise Securities will be delivered by the
Company to the Custodian in accordance with the terms and conditions
of such notice and such instructions as if such death, incapacity or
other event had not occurred, regardless of whether or not the Company
shall have received notice of such death, incapacity or other event.
In respect of any statements in or omissions from the Registration
Statement or the Prospectus or any supplements thereto made in
reliance upon and in conformity with information furnished in writing
to the Company by any Several Selling Shareholder specifically for use
in connection with the preparation thereof, such Several Selling
Shareholder hereby makes the same representations and warranties to
each Underwriter as the Company makes to such Underwriter under
paragraph A.3. of this Section.
II. Purchase and Sale.
A. Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company and the
Selling Shareholders agree, severally and not jointly, to sell to each
Underwriter, and each Underwriter agrees, severally and not jointly,
to purchase from the Company and the Selling Shareholders, at a
purchase price of $_________ per share, the amount of the Underwritten
Securities set forth opposite such Underwriter's name in Schedule I
hereto.
B. Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company and the
Selling Shareholders named in Schedule III hereto hereby grant an
option to the several Underwriters to purchase, severally and not
jointly, up to 600,000 shares of the Option Securities at the same
purchase price per share as the Underwriters shall pay for the
Underwritten Securities. Said option may be exercised only to cover
over-allotments in the sale of the Underwritten Securities by the
Underwriters. Said option may be exercised in whole or in part at any
time (but not more than once) on or before the 30th day after the date
of the Prospectus upon written or telegraphic notice by the
Representatives to the Company and such Selling Shareholders setting
forth the number of shares of the Option Securities as to which the
several Underwriters are exercising the option and the settlement
date. Delivery of certificates for the shares of Option Securities by
the Company and such Selling Shareholders, and payment therefor to the
Company and such Selling Shareholders, shall be made as
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provided in Section III hereof. The maximum number of shares of the
Option Securities to be sold by the Company and each of such Selling
Shareholders is set forth in Schedule III hereto. In the event that
the Underwriters exercise less than their full over-allotment option,
the number of shares of the Option Securities to be sold by each party
listed on Schedule III shall be, as nearly as practicable, in the same
proportion to each other as are the number of shares of the Option
Securities listed opposite their respective names on said Schedule
III. The number of shares of the Option Securities to be purchased by
each Underwriter shall be the same percentage of the total number of
shares of the Option Securities to be purchased by the several
Underwriters as such Underwriter is purchasing of the Underwritten
Securities, subject to such adjustments as you in your absolute
discretion shall make to eliminate any fractional shares.
III. Delivery and Payment.
Delivery of and payment for the Underwritten Securities and
the Option Securities (if the option provided for in Section II.B hereof shall
have been exercised on or before the third Business Day prior to the Closing
Date) shall be made at 10:00 AM, New York City time, on____________________,
1997, or at such time on such later date not more than three Business Days
after the foregoing date as the Representatives shall designate, which date and
time may be postponed by agreement among the Representatives, the Company and
the Selling Shareholders or as provided in Section IX hereof (such date and
time of delivery and payment for the Securities being herein called the
"Closing Date"). Except as provided in the immediately following paragraph,
delivery of the Securities shall be made to the Representatives for the
respective accounts of the several Underwriters against payment by the several
Underwriters through the Representatives of the respective aggregate purchase
prices of the Securities being sold by the Company and each of the Selling
Shareholders to or upon the order of the Company and such Selling Shareholders
by wire transfer payable in same-day funds to an account specified by the
Company. Delivery of the Underwritten Securities and the Option Securities to
be sold by the Company shall be made through the facilities of The Depository
Trust Company unless the Representatives shall otherwise instruct.
Delivery of the Exercise Securities shall be made to the
Representatives for the respective accounts of the several Underwriters against
payment by the several Underwriters through the Representatives (i) to the
Company of the aggregate exercise price of the options described in Schedule
VII hereto and (ii) to each of the Exercising Selling Shareholders of the
excess, if any, of the aggregate purchase price of the Exercise Securities
being sold by such Exercising Selling Shareholder over the amount paid with
respect to such Exercise Securities pursuant to clause (i) of this sentence, in
each case, by wire transfer payable in same day funds to the account specified
pursuant to the preceding paragraph.
Delivery of the Underwritten Securities and the Option
Securities to be sold by the Selling Shareholders shall be made at such
location as the Representatives shall reasonably designate at least one
Business Day in advance of the Closing Date and payment for the Securities
shall be made at the office of _____________________________, New York, New
York; certificates for such Securities shall be registered in such names and in
such denominations as the
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Representatives may request not less than two full Business Days in advance of
the Closing Date. The Company agrees to have the certificates for such
Securities available for inspection, checking and packaging by the
Representatives in New York, New York, not later than 1:00 PM on the Business
Day prior to the Closing Date.
Each Selling Shareholder will pay all applicable state
transfer taxes, if any, involved in the transfer to the several Underwriters of
the Securities to be purchased by them from such Selling Shareholder and the
respective Underwriters will pay any additional stock transfer taxes involved
in further transfers.
Except as provided in the immediately following paragraph, if
the option provided for in Section II.B hereof is exercised after the third
business day prior to the Closing Date, the Company and the Selling
Shareholders named in Schedule III hereto will deliver the Option Securities
(at the expense of the Company) to the Representatives on the date specified by
the Representatives (which shall be within three Business Days after exercise
of said option) for the respective accounts of the several Underwriters,
against payment by the several Underwriters through the Representatives of the
purchase price thereof to or upon the order of the Company and the Selling
Shareholders identified in Schedule III by wire transfer payable in same-day
funds to an account specified by the Company and the Selling Shareholders named
in Schedule III hereto. If settlement for the Option Securities occurs after
the Closing Date, the Company and such Selling Shareholders will deliver to the
Representatives on the settlement date for the Option Securities, and the
obligation of the Underwriters to purchase the Option Securities shall be
conditioned upon receipt of, supplemental opinions, certificates and letters
confirming as of such date the opinions, certificates and letters delivered on
the Closing Date pursuant to Section VI hereof.
In the event that any of the shares are delivered pursuant to
the exercise of options, delivery of such shares shall be made to the
Representatives for the respective accounts of the several Underwriters against
payment by the several Underwriters through the Representatives (i) to the
Company of the aggregate exercise price of such options and (ii) to each of the
Selling Shareholders of the excess, if any, of the aggregate purchase price of
such shares being sold by such Selling Shareholder over the amount paid with
respect to such shares pursuant to clause (i) of this sentence, in each case,
by wire transfer payable in same day funds to the account specified pursuant to
the preceding paragraph.
IV. Offering by Underwriters.
It is understood that the several Underwriters propose to
offer the Securities for sale to the public as set forth in the Prospectus.
V. Agreements.
A. The Company agrees with the several Underwriters that:
1. The Company will use its best efforts to
cause the Registration Statement, if not effective at the
Execution Time, and any amendment thereof,
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to become effective. Prior to the termination of the
offering of the Securities, the Company will not file any
amendment of the Registration Statement or supplement to
the Prospectus or any Rule 462(b) Registration Statement
unless the Company has furnished you a copy for your review
prior to filing and will not file any such proposed
amendment or supplement to which you reasonably object.
Subject to the foregoing sentence, if the Registration
Statement has become or becomes effective pursuant to Rule
430A, or filing of the Prospectus is otherwise required
under Rule 424(b), the Company will cause the Prospectus,
properly completed, and any supplement thereto to be filed
with the Commission pursuant to the applicable paragraph of
Rule 424(b) within the time period prescribed and will
provide evidence satisfactory to the Representatives of
such timely filing. The Company will promptly advise the
Representatives (A) when the Registration Statement, if not
effective at the Execution Time, shall have become
effective, (B) when the Prospectus, and any supplement
thereto, shall have been filed (if required) with the
Commission pursuant to Rule 424(b) or when any Rule 462(b)
Registration Statement shall have been filed with the
Commission, (C) when, prior to termination of the offering
of the Securities, any amendment to the Registration
Statement shall have been filed or become effective, (D) of
any request by the Commission or its staff for any
amendment of the Registration Statement, or any Rule 462(b)
Registration Statement, or for any supplement to the
Prospectus or of any additional information, (E) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that
purpose and (F) of the receipt by the Company of any
notification with respect to the suspension of the
qualification of the Securities for sale in any
jurisdiction or the initiation or threatening of any
proceeding for such purpose. The Company will use its best
efforts to prevent the issuance of any such stop order or
the suspension of any such qualification and, if issued, to
obtain as soon as possible the withdrawal thereof.
2. If, at any time when a prospectus relating to
the Securities is required to be delivered under the Act,
any event occurs as a result of which the Prospectus as
then supplemented would include any untrue statement of a
material fact or omit to state any material fact necessary
to make the statements therein in the light of the
circumstances under which they were made not misleading, or
if it shall be necessary to amend the Registration
Statement or supplement the Prospectus to comply with the
Act or the Exchange Act or the respective rules thereunder,
the Company promptly will (i) prepare and file with the
Commission, subject to the second sentence of paragraph A
of this Section V, an amendment or supplement which will
correct such statement or omission or effect such
compliance and (ii) supply any supplemented Prospectus to
you in such quantities as you may reasonably request.
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3. As soon as practicable, the Company will make
generally available to its security holders and to the
Representatives an earnings statement or statements of the
Company and its subsidiaries which will satisfy the
provisions of Section 11(a) of the Act and Rule 158 under
the Act.
4. The Company will furnish to the
Representatives and counsel for the Underwriters, without
charge, signed copies of the Registration Statement
(including exhibits thereto) and to each other Underwriter
a copy of the Registration Statement (without exhibits
thereto) and, so long as delivery of a prospectus by an
Underwriter or dealer may be required by the Act, as many
copies of each Preliminary Prospectus and the Prospectus
and any supplement thereto as the Representatives may
reasonably request. The Company will pay the expenses of
printing or other production of all documents relating to
the offering.
5. The Company will in good faith seek to
arrange, if necessary and with the cooperation of the
Underwriters, for the qualification of the Securities for
sale under the laws of such jurisdictions as the
Representatives may designate, will maintain such
qualifications in effect so long as required for the
distribution of the Securities (provided that neither the
Company nor its Subsidiaries will be required to qualify as
a foreign corporation or consent to service of process in
any such jurisdiction) and will pay any fee of the National
Association of Securities Dealers, Inc. (the "NASD"), in
connection with its review of the offering.
6. The Company will not, for a period of 180
days following the Execution Time, without the prior
written consent of Salomon Brothers Inc, offer, sell or
contract to sell, or otherwise dispose of (or enter into
any transaction which is designed to, or could be expected
to, result in the disposition (whether by actual
disposition or effective economic disposition due to cash
settlement or otherwise) by the Company or any affiliate of
the Company or any person in privity with the Company or
any affiliate of the Company) directly or indirectly, or
announce the offering of, any other shares of Common Stock
or any securities convertible into, or exchangeable for,
shares of Common Stock; provided, however, that the Company
may issue and sell Common Stock pursuant to any director or
employee stock option plan, stock ownership plan or
dividend reinvestment plan of the Company in effect at the
Execution Time and the Company may issue Common Stock
issuable upon the conversion of securities or the exercise
of warrants outstanding at the Execution Time.
B. Each Selling Shareholder agrees with the several Underwriters
that it will, at the Execution Time, furnish to the Representatives
through the Company the letter specified in paragraph I. of Section VI
hereof.
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VI. Conditions to the Obligations of the Underwriters.
The obligations of the Underwriters to purchase the
Underwritten Securities and the Option Securities, as the case may be, shall be
subject to the accuracy of the representations and warranties on the part of
the Company and the Selling Shareholders contained herein as of the Execution
Time, the Closing Date and any settlement date pursuant to Section III hereof,
to the accuracy of the statements of the Company and the Selling Shareholders
made in any certificates pursuant to the provisions hereof, to the performance
by the Company and the Selling Shareholders of their respective obligations
hereunder and to the following additional conditions:
A. If the Registration Statement has not become effective prior to the
Execution Time, unless the Representatives agree in writing to a later
time, the Registration Statement will become effective not later than
(i) 6:00 PM New York City time on the date of determination of the
public offering price, if such determination occurred at or prior to
3:00 PM New York City time on such date or (ii) 9:30 AM on the
Business Day following the day on which the public offering price was
determined, if such determination occurred after 3:00 PM New York City
time on such date; if filing of the Prospectus, or any supplement
thereto, is required pursuant to Rule 424(b), the Prospectus, and any
such supplement, will be filed in the manner and within the time
period required by Rule 424(b); and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and
no proceedings for that purpose shall have been instituted or
threatened.
B. The Company shall have furnished to the Representatives the opinion
of Holme ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the Company, dated the
Closing Date, to the effect that:
1. each of the Company and its subsidiaries has
been duly incorporated and is validly existing as a
corporation in good standing under the laws of the
jurisdiction in which it is chartered or organized, with
full corporate power and authority to own its properties
and conduct its business as described in the Prospectus;
2. all the outstanding shares of capital stock
of each subsidiary have been duly and validly authorized
and issued and are fully paid and nonassessable, and,
except as otherwise set forth in the Prospectus, all
outstanding shares of capital stock of the subsidiaries are
owned by the Company either directly or through wholly
owned subsidiaries free and clear of any perfected security
interest and, to the knowledge of such counsel, after due
inquiry, any other security interests, claims, liens or
encumbrances;
3. the Company's authorized equity
capitalization is as set forth in the Prospectus; the
capital stock of the Company conforms in all material
respects to the description thereof contained in the
Prospectus; the outstanding shares of Common Stock
(including the Securities being sold hereunder by the
Selling Shareholders) have been duly and validly authorized
and issued and are fully
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paid and nonassessable; the Securities being sold hereunder
by the Company have been duly and validly authorized, and,
when issued and delivered to and paid for by the
Underwriters pursuant to this Agreement, will be fully paid
and nonassessable; the Company has taken the actions
required by the published rules of the Nasdaq Stock Market
to qualify the Securities for inclusion in the Nasdaq Stock
Market; the certificates for the Securities are in valid
and sufficient form; and the holders of outstanding shares
of capital stock of the Company are not entitled to
preemptive or other rights to subscribe for the Securities;
and, except as set forth in the Prospectus, no options,
warrants or other rights to purchase, agreements or other
obligations to issue, or rights to convert any obligations
into or exchange any securities for, shares of capital
stock of or ownership interests in the Company are
outstanding;
4. to the knowledge of such counsel, there is no
pending or threatened action, suit or proceeding by or
before any court or governmental agency, authority or body
or any arbitrator involving the Company or any of its
subsidiaries of a character required to be disclosed in the
Registration Statement that is not adequately described in
the Prospectus, and there is no franchise, contract or
other document of a character required to be described in
the Registration Statement or Prospectus, or to be filed as
an exhibit thereto, that is not described or filed as
required; and the statements in each of (a) the Prospectus
under the headings "Risk Factors -- Protection of Know-how
and Trade Secrets; -- Environmental Compliance; -- Shares
Eligible for Future Sale; and -- Anti-Takeover Provisions"
and "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Recent
Developments", (b) the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1996, under the
headings "Item 1. Business --Patents and Trademarks",
"Item 2. Description of Property" and "Item 3. Legal
Proceedings" and (c) the Company's Proxy Statement dated
April 29, 1997, under the heading "Certain Relationships
and Related Transactions", to the extent that such
statements purport to describe certain provisions of
federal laws, laws of the State of Colorado, rules or
regulations, the Company's charter and by-laws, and
contracts to which the Company is a party, have been
reviewed by such counsel and fairly summarize the matters
therein described;
5. the Registration Statement has become
effective under the Act; any required filing of the
Prospectus, and any supplements thereto, pursuant to Rule
424(b) has been made in the manner and within the time
period required by Rule 424(b); to the knowledge of such
counsel, no stop order suspending the effectiveness of the
Registration Statement has been issued, no proceedings for
that purpose have been instituted or threatened and the
Registration Statement and the Prospectus (other than the
financial statements and other financial information
contained therein, as to which such counsel need express no
opinion) comply as to form in all material respects with
the applicable
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requirements of the Act and the Exchange Act and the
respective rules thereunder;
6. this Agreement has been duly authorized,
executed and delivered by the Company;
7. the Company is not and, after giving effect
to the offering and sale of the Securities and the
application of the proceeds thereof as described in the
Prospectus, will not be an "investment company" as defined
in the Investment Company Act of 1940, as amended;
8. no consent, approval, authorization, filing
with or order of any court or governmental agency or body
is required for the consummation by the Company of the
transactions contemplated herein, except such as have been
obtained under the Act and such as may be required under
the blue sky laws of any jurisdiction in connection with
the purchase and distribution of the Securities by the
Underwriters in the manner contemplated in this Agreement
and in the Prospectus;
9. neither the issue and sale of the Securities,
nor the consummation by the Company of any other of the
transactions herein contemplated nor the fulfillment of the
terms hereof will conflict with, result in a breach or
violation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or its
subsidiaries pursuant to, (i) the charter or by-laws of
the Company or its subsidiaries or (ii) the terms of any
indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation,
condition, covenant or instrument known to such counsel
after due inquiry to which the Company or its subsidiaries
is a party or bound or to which its property is subject, or
(iii) any statute, law, rule, regulation, judgment, order
or decree known to such counsel after due inquiry to be
applicable to the Company or its subsidiaries of any court,
regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the
Company or its subsidiaries or any of its or their
properties; and
10. to such Counsel's knowledge after due inquiry
no holders of securities of the Company have rights to the
registration of such securities under the Registration
Statement except for such rights of the Registration Rights
Shareholders as have been effectively waived.
In addition, such counsel shall state that nothing has come to such counsel's
attention that leads such counsel to believe that on the Effective Date or at
the Execution Time the Registration Statement (other than the financial
statements, including the notes thereto, and supporting schedules or other
financial data contained therein, as to which such counsel need not comment)
contains or contained any untrue statement of a material fact or omitted or
omits to state any material fact required to be stated therein or necessary in
order to make the statements therein not
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misleading, or that the Prospectus (other than the financial statements,
including the notes thereto, and supporting schedules or other financial data
contained therein, as to which such counsel need not comment) contained or
contains, as of its date or as of the Closing Date, any untrue statement of a
material fact or omitted or omits, as of such dates, to state a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
In rendering such opinion, such counsel may rely (a) as to matters involving
the application of laws of any jurisdiction other than the State of Colorado,
the State of New York or the Federal laws of the United States, to the extent
they deem proper and specified in such opinion, upon the opinion of other
counsel of good standing whom they believe to be reliable and who are
satisfactory to counsel for the Underwriters and (b) as to matters of fact, to
the extent they deem proper, on certificates of responsible officers of the
Company and public officials. References to the Prospectus in this paragraph B
include any supplements thereto at the Closing Date.
C. The Selling Shareholders shall have furnished to the
Representatives the opinion of Holme ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for
the Selling Shareholders, dated the Closing Date, to the effect that:
1. this Agreement, the Custody Agreement and the
Power-of-Attorney have been duly executed and delivered by
the Selling Shareholders, the Custody Agreement is valid
and binding on the Selling Shareholders and each Selling
Shareholder has full legal right and authority to sell,
transfer and deliver in the manner provided in this
Agreement and the Custody Agreement the Securities being
sold by such Selling Shareholder hereunder;
2. the delivery by each Selling Shareholder to
the several Underwriters of certificates for the Securities
being sold hereunder by such Selling Shareholder against
payment therefor as provided herein, will pass good and
marketable title to such Securities to the several
Underwriters, free and clear of all liens, encumbrances,
equities and claims whatsoever;
3. no consent, approval, authorization or order
of any court or governmental agency or body is required for
the consummation by any Selling Shareholder of the
transactions contemplated herein, except such as may have
been obtained under the Act and such as may be required
under the blue sky laws of any jurisdiction in connection
with the purchase and distribution of the Securities by the
Underwriters and such other approvals (specified in such
opinion) as have been obtained; and
4. neither the sale of the Securities being sold
by any Selling Shareholder nor the consummation of any
other of the transactions herein contemplated by any
Selling Shareholder or the fulfillment of the terms hereof
by any Selling Shareholder will conflict with, result in a
breach or violation of, or constitute a default under (i)
any law or the terms of any indenture or other agreement or
instrument known to such counsel and to which any Selling
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Shareholder is a party or bound, or any judgment, order or
decree known to such counsel to be applicable to any
Selling Shareholder of any court, regulatory body,
administrative agency, governmental body or arbitrator
having jurisdiction over any Selling Shareholder or (ii) in
the case of a Selling Shareholder that is a partnership or
trust, the partnership agreement, trust agreement or other
organizational documents of such Selling Shareholder.
In rendering such opinion, such counsel may rely (a) as to matters involving
the application of laws of any jurisdiction other than the State of Colorado,
the State of New York or the Federal laws of the United States, to the extent
they deem proper and specified in such opinion, upon the opinion of other
counsel of good standing whom they believe to be reliable and who are
satisfactory to counsel for the Underwriters, and (b) as to matters of fact, to
the extent they deem proper, on certificates of the Selling Shareholders and
public officials.
D. The Representatives shall have received from Cleary, Gottlieb,
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Underwriters, such opinion or
opinions, dated the Closing Date, with respect to the issuance and
sale of the Securities, the Registration Statement, the Prospectus
(together with any supplement thereto) and other related matters as
the Representatives may reasonably require, and the Company and each
Selling Shareholder shall have furnished to such counsel such
documents as they request for the purpose of enabling them to pass
upon such matters.
E. The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board or the
President and the principal financial or accounting officer of the
Company, dated the Closing Date, to the effect that the signers of
such certificate have carefully examined the Registration Statement,
the Prospectus, any supplements to the Prospectus and this Agreement
and that:
1. the representations and warranties of the
Company in this Agreement are true and correct in all
material respects on and as of the Closing Date with the
same effect as if made on the Closing Date and the Company
has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or
prior to the Closing Date;
2. no stop order suspending the effectiveness of
the Registration Statement has been issued and no
proceedings for that purpose have been instituted or, to
the Company's knowledge, threatened; and
3. since the date of the most recent financial
statements included in the Prospectus (exclusive of any
supplement thereto), there has been no material adverse
change in the condition (financial or otherwise),
prospects, earnings, business or properties of the Company
and its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the
Prospectus (exclusive of any supplement thereto).
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F. Each Selling Shareholder shall have furnished to the
Representatives a certificate, signed, in the case of a Selling
Shareholder that is other than a natural person, by a representative
of such Selling Shareholder satisfactory to the Representatives and,
in any other case, by such Selling Shareholder, dated the Closing
Date, to the effect that the signer of such certificate has carefully
examined the Registration Statement, the Prospectus, any supplement to
the Prospectus and this Agreement and that the representations and
warranties of such Selling Shareholder in this Agreement are true and
correct in all material respects on and as of the Closing Date to the
same effect as if made on the Closing Date.
G. At the Execution Time and at the Closing Date, KPMG Peat Marwick
LLP shall have furnished to the Representatives letters, dated
respectively as of the Execution Time and as of the Closing Date, in
form and substance satisfactory to the Representatives, confirming
that they are independent accountants within the meaning of the Act
and the Exchange Act and the respective applicable published rules and
regulations thereunder and stating in effect that:
1. in their opinion the audited financial
statements and financial statement schedules and pro forma
financial statements included or incorporated in the
Registration Statement and the Prospectus and reported on
by them comply in form in all material respects with the
applicable accounting requirements of the Act and the
Exchange Act and the related published rules and
regulations;
2. on the basis of a reading of the latest
unaudited financial statements made available by the
Company and its subsidiaries; carrying out certain
specified procedures (but not an examination in accordance
with generally accepted auditing standards) which would not
necessarily reveal matters of significance with respect to
the comments set forth in such letter; a reading of the
minutes of the meetings of the Shareholders, directors and
compensation and audit committees of the Company and the
subsidiaries; and inquiries of certain officials of the
Company who have responsibility for financial and
accounting matters of the Company and its subsidiaries as
to transactions and events subsequent to September 30,
1997, nothing came to their attention which caused them to
believe that:
a. with respect to the period subsequent to September 30,
1997, there were any changes, at a specified date not more
than three days prior to the date of the letter, in the
long-term debt of the Company and its subsidiaries or
capital stock of the Company or decreases in the
Shareholders' equity of the Company or decreases in working
capital of the Company and its subsidiaries as compared
with the amounts shown on the September 30, 1997,
consolidated balance sheet included or incorporated in the
Registration Statement and the Prospectus, or for the
period from October 1, 1997 to such specified date there
were any decreases, as compared with the corresponding
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period in the preceding quarter in net revenues or income
before income taxes or in total or per share amounts of net
income of the Company and its subsidiaries; operating
income; net interest income; net interest income after
provision for loan losses, except in all instances for
changes or decreases set forth in such letter, in which
case the letter shall be accompanied by an explanation by
the Company as to the significance thereof unless said
explanation is not deemed necessary by the Representatives;
or
b. the information included in the Registration Statement
and Prospectus in response to Regulation S-K, Item 301
(Selected Financial Data), Item 302 (Supplementary
Financial Information), Item 402 (Executive Compensation)
and Item 503(d) (Ratio of Earnings to Fixed Charges) is not
in conformity with the applicable disclosure requirements
of Regulation S-K.
3. they have performed certain other specified
procedures as a result of which they determined that
certain information of an accounting, financial or
statistical nature (which is limited to accounting,
financial or statistical information derived from the
general accounting records of the Company and its
subsidiaries) set forth in the Registration Statement and
the Prospectus, including the information set forth under
the captions "Summary Financial Data", "Capitalization",
"Selected Consolidated Financial Data" and "Management's
Discussion and Analysis of Financial Conditions and Results
of Operations" in the Prospectus, the information included
or incorporated from Items 1, 2, 6, 7 and 11 of the
Company's Annual Report on Form 10-K, incorporated in the
Registration Statement and the Prospectus, the information
included in the "Management's Discussion and Analysis of
Results of Operations and Financial Condition" included or
incorporated in the Company's Quarterly Reports on Form
10-Q incorporated in the Registration Statement and the
Prospectus [and the financial statements included or
incorporated in the Form 8-K and Form 8-K/A incorporated in
the Registration Statement and the Prospectus], agrees with
the accounting records of the Company and its subsidiaries,
excluding any questions of legal interpretation.
4. on the basis of a reading of the unaudited
pro forma financial statements included or incorporated in
the Registration Statement and the Prospectus (the "pro
forma financial statements"); carrying out certain
specified procedures; inquiries of certain officials of the
Company and its subsidiaries, who have responsibility for
financial and accounting matters; and proving the
arithmetic accuracy of the application of the pro forma
adjustments to the historical amounts in the pro forma
financial statements, nothing came to their attention which
caused them to believe that the pro forma financial
statements do not comply in form in all material respects
with the applicable accounting requirements of Rule 11-02
of Regulation S-X or that the pro forma adjustments have
not been properly applied to the historical amounts in the
compilation of such statements.
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References to the Prospectus in this paragraph G includes any supplement
thereto at the date of the letter.
H. Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive of
any amendment thereof) and the Prospectus (exclusive of any supplement
thereto), there shall not have been (i) any change or decrease
specified in the letter or letters referred to in paragraph G of this
Section VI or (ii) any change, or any development involving a
prospective change, in or affecting the condition (financial or
otherwise), earnings, business or properties of the Company and its
subsidiaries taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth
in or contemplated in the Prospectus (exclusive of any supplement
thereto) the effect of which, in any case referred to in clause (i) or
(ii) above, is, in the sole judgment of the Representatives, so
material and adverse as to make it impractical or inadvisable to
proceed with the offering or delivery of the Securities as
contemplated by the Registration Statement (exclusive of any amendment
thereof) and the Prospectus (exclusive of any supplement thereto).
I. At the Execution Time, the Company shall have furnished to the
Representatives a letter substantially in the form of Exhibit A hereto
from each officer and director of the Company, from each Selling
Shareholder and from each other shareholder listed in Schedule VI
hereto, in any case, addressed to the Representatives, in which each
such person agrees not to offer, sell, contract to sell, pledge or
otherwise dispose of, or file a registration statement with the
Commission in respect of, or establish or increase a put equivalent
position or liquidate or decrease a call equivalent position within
the meaning of Section 16 of the Exchange Act with respect to, any
shares of capital stock of the Company or any securities convertible
into or exercisable or exchangeable for such capital stock, or
publicly announce an intention to effect any such transaction, for a
period of 180 days or 360 days, in each case as specified in Schedule
VI hereto, after the date of this Agreement, other than (i) any shares
of Common Stock to be sold hereunder, (ii) any option or warrant or
the conversion of a security outstanding on the date hereof and
referred to in the Prospectus to which this Agreement relates and
(iii) other than shares of Common Stock disposed of as bona fide gifts
approved by Salomon Brothers Inc.
J. The Securities shall be duly authorized for listing on the Nasdaq
Stock Market upon issuance.
K. Prior to the Closing Date, the Company shall have furnished to the
Representatives such further information, certificates and documents
as the Representatives may reasonably request.
If any of the conditions specified in this Section VI shall
not have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Representatives and counsel for the
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Underwriters, this Agreement and all obligations of the Underwriters hereunder
may be canceled at, or at any time prior to, the Closing Date by the
Representatives. Notice of such cancellation shall be given to the Company and
each Selling Shareholder in writing or by telephone or facsimile confirmed in
writing.
The documents required to be delivered by this Section VI
shall be delivered at the office of Cleary, Gottlieb, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel
for the Underwriters, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, on the
Closing Date.
VII. Reimbursement of Underwriters' Expenses.
If the sale of the Securities provided for herein is not
consummated because any condition to the obligations of the Underwriters set
forth in Section VI hereof is not satisfied, because of any termination
pursuant to Section X hereof or because of any refusal, inability or failure on
the part of the Company or any Selling Shareholder to perform any agreement
herein or comply with any provision hereof other than by reason of a default by
any of the Underwriters, the Company will reimburse the Underwriters severally
through Salomon Brothers Inc on demand for all out-of-pocket expenses
(including reasonable fees and disbursements of counsel) that shall have been
incurred by them in connection with the proposed purchase and sale of the
Securities. If the Company is required to make any payments to the
Underwriters under this Section VII because of any Selling Shareholder's
refusal, inability or failure to satisfy any condition to the obligations of
the Underwriters set forth in Section VI, the Selling Shareholders pro rata in
proportion to the percentage of Securities to be sold by each shall reimburse
the Company on demand for all amounts so paid.
VIII. Indemnification and Contribution.
A. 1. The Company and the Joint Selling Shareholders jointly and
severally agree to indemnify and hold harmless each Underwriter, the
directors, officers, employees and agents of each Underwriter and each
person who controls any Underwriter within the meaning of either the
Act or the Exchange Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become
subject under the Act, the Exchange Act or other Federal or state
statutory law or regulation, at common law or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in the
registration statement for the registration of the Securities as
originally filed or in any amendment thereof, or in any Preliminary
Prospectus or the Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, and agrees to reimburse each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the Company and
the Joint Selling Shareholders will not be liable in any such case to
the extent that any such loss, claim, damage or liability arises out
of or is based upon any
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26
such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with
written information furnished to the Company by or on behalf of any
Underwriter through the Representatives specifically for inclusion
therein. This indemnity agreement will be in addition to any
liability which the Company or the Joint Selling Shareholders may
otherwise have.
2. Each Several Selling Shareholder severally agrees to
indemnify and hold harmless the Company, each of its directors, each
of its officers who signs the Registration Statement, each
Underwriter, the directors, officers, employees and agents of each
Underwriter and each person who controls the Company or any
Underwriter within the meaning of either the Act or the Exchange Act
to the same extent as the foregoing indemnity from the Company and the
Joint Selling Shareholders to each Underwriter, but only with
reference to written information furnished to the Company by or on
behalf of such Several Selling Shareholder specifically for inclusion
in the documents referred to in the foregoing indemnity. This
indemnity agreement will be in addition to any liability which any
Several Selling Shareholder may otherwise have.
B. Each Underwriter severally agrees to indemnify and hold harmless
the Company, each of its directors, each of its officers who signs the
Registration Statement, and each person who controls the Company
within the meaning of either the Act or the Exchange Act and each
Selling Shareholder, to the same extent as the foregoing indemnity to
each Underwriter, but only with reference to written information
relating to such Underwriter furnished to the Company by or on behalf
of such Underwriter through the Representatives specifically for
inclusion in the documents referred to in the foregoing indemnity.
This indemnity agreement will be in addition to any liability which
any Underwriter may otherwise have. The Company and each Selling
Shareholder acknowledge that the statements set forth in the last
paragraph of the cover page regarding delivery of the Securities, the
stabilization legend in block capital letters on page 2 and, under the
heading "Underwriting" (i) the sentences related to concessions and
reallowances and (ii) the paragraph related to stabilization in any
Preliminary Prospectus and the Prospectus constitute the only
information furnished in writing by or on behalf of the several
Underwriters for inclusion in any Preliminary Prospectus or the
Prospectus.
C. Promptly after receipt by an indemnified party under this Section
VIII of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section VIII, notify the indemnifying
party in writing of the commencement thereof; but the failure so to
notify the indemnifying party (i) will not relieve it from liability
under paragraph A or B above unless and to the extent it did not
otherwise learn of such action and such failure results in the
forfeiture by the indemnifying party of substantial rights and
defenses and (ii) will not, in any event, relieve the indemnifying
party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraph A or B above. The
indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to
represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall
not
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27
thereafter be responsible for the fees and expenses of any separate
counsel retained by the indemnified party or parties except as set
forth below); provided, however, that such counsel shall be
satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the
indemnified party in an action, the indemnified party shall have the
right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses
of such separate counsel, if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present
such counsel with a conflict of interest, (ii) the actual or potential
defendants in, or targets of, any such action include both the
indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded 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, (iii)
the indemnifying party shall not have employed counsel satisfactory to
the indemnified party to represent the indemnified party within a
reasonable time after notice of the institution of such action or (iv)
the indemnifying party shall authorize the indemnified party to employ
separate counsel at the expense of the indemnifying party. An
indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of
any judgment with respect to any pending or threatened claim, action,
suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are
actual or potential parties to such claim or action) unless such
settlement, compromise or consent includes an unconditional release of
each indemnified party from all liability arising out of such claim,
action, suit or proceeding.
D. In the event that the indemnity provided in paragraph A or B of
this Section VIII is unavailable to or insufficient to hold harmless
an indemnified party for any reason, the Company and the Selling
Shareholders, jointly and severally, and the Underwriters agree to
contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection
with investigating or defending same) (collectively "Losses") to which
the Company, one or more of the Selling Shareholders and one or more
of the Underwriters may be subject in such proportion as is
appropriate to reflect the relative benefits received by the Company
and the Selling Shareholders on the one hand and by the Underwriters
on the other from the offering of the Securities; provided, however,
that in no case shall any Underwriter (except as may be provided in
any agreement among underwriters relating to the offering of the
Securities) be responsible for any amount in excess of the
underwriting discount or commission applicable to the Securities
purchased by such Underwriter hereunder. If the allocation provided
by the immediately preceding sentence is unavailable for any reason,
the Company and the Selling Shareholders, jointly and severally, and
the Underwriters shall contribute in such proportion as is appropriate
to reflect not only such relative benefits but also the relative fault
of the Company and the Selling Shareholders on the one hand and of the
Underwriters on the other in connection with the statements or
omissions which resulted in such Losses as well as any other relevant
equitable considerations. Benefits received by the Company and the
Selling Shareholders shall be deemed to be equal to the total net
proceeds from the offering (before deducting expenses) received by
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28
it, and benefits received by the Underwriters shall be deemed to be
equal to the total underwriting discounts and commissions, in each
case as set forth on the cover page of the Prospectus. Relative fault
shall be determined by reference to, among other things, whether any
untrue or any alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information provided by the Company or the Selling Shareholders on the
one hand or the Underwriters on the other, the intent of the parties
and their relative knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The Company,
the Selling Shareholders and the Underwriters agree that it would not
be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take
account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph D, no person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f)
of the Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. For purposes of this
Section VIII, each person who controls an Underwriter within the
meaning of either the Act or the Exchange Act and each director,
officer, employee and agent of an Underwriter shall have the same
rights to contribution as such Underwriter, and each person who
controls the Company within the meaning of either the Act or the
Exchange Act, each officer of the Company who shall have signed the
Registration Statement and each director of the Company shall have the
same rights to contribution as the Company, subject in each case to
the applicable terms and conditions of this paragraph D.
E. Notwithstanding any other provision of this agreement to the
contrary:
1. the liability of each Selling Shareholder
under such Selling Shareholder's representations and
warranties contained in Section I hereof and under the
indemnity and contribution agreements contained in this
Section VIII shall be limited to an amount equal to the
initial public offering price of the Securities sold by
such Selling Shareholder to the Underwriters;
2. none of the Selling Shareholders shall have
any liability with respect to the representations and
warranties contained in Section I hereof, except to the
extent that an Underwriter, or a director, officer or agent
of an Underwriter or any person who controls any
Underwriter within the meaning of either the Act or the
Exchange Act is unable to satisfy a claim against the
Company in respect of a breach or alleged breach of such
representations and warranties; and
3. none of the Selling Shareholders shall have
any liability under the indemnity and contribution
agreements contained in this Section VIII, except to the
extent that the indemnification and contribution
obligations of the Company provided for in this Section
VIII are unavailable or insufficient by reason of a Payment
Default to hold an Underwriter, or a director, officer or
agent of an Underwriter or any person who controls any
Underwriter within the meaning of either the Act or the
Exchange Act harmless in respect of any
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29
losses, claims, damages or liabilities (or actions in
respect thereof) referred to in such sections to which such
Underwriter or such other person may be subject;
provided, however, that nothing in this paragraph E shall prohibit the
Underwriters from joining any Selling Shareholder as a party in any claim
(including without limitation any counterclaim or cross-claim) against the
Company for breach of the representations and warranties contained in Section I
hereof or for payment under the indemnity and contribution agreements contained
in this Section VIII. The Company and the Selling Shareholders may agree, as
among themselves and without limiting the rights of the Underwriters under this
Agreement, as to the respective amounts of such liability for which they each
shall be responsible.
IX. Default by an Underwriter.
If any one or more Underwriters shall fail to purchase and pay
for any of the Securities agreed to be purchased by such Underwriter or
Underwriters hereunder and such failure to purchase shall constitute a default
in the performance of its or their obligations under this Agreement, the
remaining Underwriters shall be obligated severally to take up and pay for (in
the respective proportions which the amount of Securities set forth opposite
their names in Schedule I hereto bears to the aggregate amount of Securities
set forth opposite the names of all the remaining Underwriters) the Securities
which the defaulting Underwriter or Underwriters agreed but failed to purchase;
provided, however, that in the event that the aggregate amount of Securities
which the defaulting Underwriter or Underwriters agreed but failed to purchase
shall exceed 10% of the aggregate amount of Securities set forth in Schedule I
hereto, the remaining Underwriters shall have the right to purchase all, but
shall not be under any obligation to purchase any, of the Securities, and if
such nondefaulting Underwriters do not purchase all the Securities, this
Agreement will terminate without liability to any nondefaulting Underwriter,
the Selling Shareholders or the Company. In the event of a default by any
Underwriter as set forth in this Section IX, the Closing Date shall be
postponed for such period, not exceeding five Business Days, as the
Representatives shall determine in order that the required changes in the
Registration Statement and the Prospectus or in any other documents or
arrangements may be effected. Nothing contained in this Agreement shall
relieve any defaulting Underwriter of its liability, if any, to the Company,
the Selling Shareholders and any nondefaulting Underwriter for damages
occasioned by its default hereunder.
X. Termination.
This Agreement shall be subject to termination in the absolute
discretion of the Representatives, by notice given to the Company prior to
delivery of and payment for the Securities, if at any time prior to such time
(i) trading in the Company's Common Stock shall have been suspended by the
Commission or the Nasdaq National Market or trading in securities generally on
the New York Stock Exchange or the Nasdaq National Market shall have been
suspended or limited or minimum prices shall have been established on such
Exchange or National Market, (ii) a banking moratorium shall have been declared
either by Federal or New York State authorities or (iii) there shall have
occurred any outbreak or escalation of hostilities,
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30
declaration by the United States of a national emergency or war or other
calamity or crisis the effect of which on financial markets is such as to make
it, in the sole judgment of the Representatives, impractical or inadvisable to
proceed with the offering or delivery of the Securities as contemplated by the
Prospectus (exclusive of any supplement thereto).
XI. Representations and Indemnities to Survive.
The respective agreements, representations, warranties,
indemnities and other statements of the Company or its officers, of each
Selling Shareholder and of the Underwriters set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter, any Selling Shareholder
or the Company or any of the officers, directors or controlling persons
referred to in Section VIII hereof, and will survive delivery of and payment
for the Securities. The provisions of Sections VII and VIII hereof shall
survive the termination or cancellation of this Agreement.
XII. Notices.
All communications hereunder will be in writing and effective
only on receipt, and, if sent to the Representatives, will be mailed, delivered
or telefaxed with confirmation to the Salomon Brothers Inc General Counsel (fax
no.: (▇▇▇) ▇▇▇-▇▇▇▇) and confirmed to the General Counsel, care of Salomon
Brothers Inc, at Seven ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: General Counsel; or, if sent to the Company, will be mailed,
delivered or telefaxed with confirmation to EFTC Corporation (fax no.: (303)
▇▇▇-▇▇▇▇) and confirmed to it at EFTC Corporation, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Chief Financial
Officer, or if sent to the Selling Shareholders, will be mailed, delivered or
telefaxed with confirmation to _____________________________ [facsimile number]
and confirmed to them at the addresses set forth in Schedule II hereto.
XIII. Successors.
This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and the officers and
directors and controlling persons referred to in Section VIII hereof, and no
other person will have any right or obligation hereunder.
XIV. Applicable Law.
This Agreement will be governed by and construed in accordance
with the laws of the State of New York.
XV. Counterparts.
This Agreement may be signed in one or more counterparts, each
of which shall constitute an original and all of which together shall
constitute one and the same agreement.
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XVI. Headings.
The section headings used herein are for convenience only and
shall not affect the construction hereof.
XVII. Definitions.
The terms which follow, when used in this Agreement, shall
have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended.
"Business Day" shall mean any day other than a Saturday, a
Sunday or a legal holiday or a day on which banking institutions or
trust companies are authorized or obligated by law to close in New
York City.
"Effective Date" shall mean each date and time that the
Registration Statement, any post-effective amendment or amendments
thereto and any Rule 462(b) Registration Statement became or become
effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto.
"Exercise Securities" shall mean the numbers of shares listed
on Schedule VII to be issued upon exercise of outstanding options
listed in Schedule VII delivered by the Exercising Shareholders to the
several Underwriters (i) on the Closing Date pursuant to this
Agreement or (ii) on the settlement date for the option provided in
Section II.B. of this Agreement, as the case may be.
"Exercising Selling Shareholders" shall mean the Selling
Shareholders appearing on Schedule VII hereto.
"Joint Selling Shareholders" shall mean the Selling
Shareholders other than ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ and August ▇.
▇▇▇▇▇▇▇▇▇.
"Payment Default" means the occurrence of each of the
following events:
(1) the Underwriters have given written notice (in accordance
with Section XII hereof) to the Company of a claim under the
indemnification or contribution provisions contained in
Section VIII hereof; and
(2) the Company shall have failed to satisfy such claim
within 30 days of receipt of such notice.
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"Preliminary Prospectus" shall mean any preliminary prospectus
referred to in paragraph I.A. above and any preliminary prospectus
included in the Registration Statement at the Effective Date that
omits Rule 430A Information.
"Prospectus" shall mean the prospectus relating to the
Securities that is first filed pursuant to Rule 424(b) after the
Execution Time or, if no filing pursuant to Rule 424(b) is required,
shall mean the form of final prospectus relating to the Securities
included in the Registration Statement at the Effective Date.
"Registration Statement" shall mean the registration statement
referred to in paragraph I.A. above, including incorporated documents,
exhibits and financial statements, as amended at the Execution Time
(or, if not effective at the Execution Time, in the form in which it
shall become effective) and, in the event any post-effective amendment
thereto or any Rule 462(b) Registration Statement becomes effective
prior to the Closing Date (as hereinafter defined), shall also mean
such registration statement as so amended or such Rule 462(b)
Registration Statement, as the case may be. Such term shall include
any Rule 430A Information deemed to be included therein at the
Effective Date as provided by Rule 430A.
"Rule 424," "Rule 430A" and "Rule 462" refer to such rules
under the Act.
"Rule 430A Information" shall mean information with respect to
the Securities and the offering thereof permitted to be omitted from
the Registration Statement when it becomes effective pursuant to Rule
430A.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b)
relating to the offering covered by the initial registration
statement.
"Several Selling Shareholders" shall mean the Selling
Shareholders other than the Joint Shareholders.
"United States or Canadian Person" shall mean any person who
is a national or resident of the United States or Canada, any
corporation, partnership, or other entity created or organized in or
under the laws of the United States or Canada or of any political
subdivision thereof, or any estate or trust the income of which is
subject to United States or Canadian Federal income taxation,
regardless of its source (other than any non-United States or
non-Canadian branch of any United States or Canadian Person), and
shall include any United States or Canadian branch of a person other
than a United States or Canadian Person.
"U.S." or "United States" shall mean the United States of
America (including the states thereof and the District of Columbia),
its territories, its possessions and other areas subject to its
jurisdiction.
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XVIII. Canada.
Each of the Underwriters hereby covenants and agrees that it
will not distribute the Securities in such a manner as to require the
filing of a prospectus or similar document (excluding a private
placement offering memorandum) with respect to the Securities under
the laws of any Province or Territory in Canada.
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If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Company, the Selling Shareholders and the several Underwriters.
Very truly yours,
EFTC Corporation
By:
-------------------------------------
Name:
Title:
▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇
August ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
By:
-------------------------------------
Name:
Title: Attorney-in-Fact
for each of the Selling
Shareholders
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The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Salomon Brothers Inc
▇.▇. ▇▇▇▇▇▇▇▇ & Co.
Pacific Crest Securities
By: Salomon Brothers Inc
By:
---------------------------
Name:
Title:
For themselves and the other
several Underwriters named in
Schedule I to the foregoing
Agreement.
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SCHEDULE I
Underwriters
NUMBER OF SHARES
TO BE
UNDERWRITERS PURCHASED
--------------------------------------------------------------------------------------------------
Salomon Brothers Inc . . . . . . . . . . . . . . . . . . . . . . .
▇.▇. ▇▇▇▇▇▇▇▇ & Co. . . . . . . . . . . . . . . . . . . . . . . . .
Pacific Crest Securities Inc. . . . . . . . . . . . . . . . . . . .
---------
Total . . . . . . . . . . . . . . . . . . . . . . 4,000,000
=========
37
SCHEDULE II
Secondary Offering
NUMBER OF SHARES
SELLING SHAREHOLDERS AND ADDRESSES TO BE SOLD
--------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇ . . . . . . . . . . . . . . . . . . . . . . . . . . 100,000
EFTC Corporation,
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇ . . . . . . . . . . . . . . . . . . . . . . . . . . 100,000
EFTC Corporation,
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ . . . . . . . . . . . . . . . . . . . . . . . . 80,000
EFTC Corporation,
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ . . . . . . . . . . . . . . . . . . . . . . . . 60,000
EFTC Corporation,
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ . . . . . . . . . . . . . . . . . . . . . . . . . 60,000
EFTC Corporation,
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ . . . . . . . . . . . . . . . . . . . . . . . . 60,000
EFTC Corporation,
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,500
EFTC Corporation,
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
August ▇. ▇▇▇▇▇▇▇▇▇ . . . . . . . . . . . . . . . . . . . . . . . . 7,500
EFTC Corporation,
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
38
▇▇▇▇▇▇ ▇▇▇▇▇ . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,500
EFTC Corporation,
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,500
EFTC Corporation,
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ . . . . . . . . . . . . . . . . . . . . . . . 5,000
EFTC Corporation,
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ . . . . . . . . . . . . . . . . . . . . . . . . 5,000
EFTC Corporation,
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
-------
Total . . . . . . . . . . . . . . . . . . . . . . 500,000
=======
2
39
SCHEDULE III
Over-Allotment Option
MAXIMUM NUMBER OF
SHARES SUBJECT TO
NAME AND ADDRESS OVER-ALLOTMENT OPTION
-----------------------------------------------------------------------------------------------------
EFTC Corporation . . . . . . . . . . . . . . . . . . . . . . . . . 100,000
▇▇▇▇▇▇ ▇. ▇▇▇▇ . . . . . . . . . . . . . . . . . . . . . . . . . . 100,000
EFTC Corporation,
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇ . . . . . . . . . . . . . . . . . . . . . . . . . . 100,000
EFTC Corporation,
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ . . . . . . . . . . . . . . . . . . . . . . . . 80,000
EFTC Corporation,
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ . . . . . . . . . . . . . . . . . . . . . . . . 60,000
EFTC Corporation,
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ . . . . . . . . . . . . . . . . . . . . . . . . . 60,000
EFTC Corporation,
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ . . . . . . . . . . . . . . . . . . . . . . . . 60,000
EFTC Corporation,
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,500
EFTC Corporation,
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
40
August ▇. ▇▇▇▇▇▇▇▇▇ . . . . . . . . . . . . . . . . . . . . . . . . 7,500
EFTC Corporation,
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,500
EFTC Corporation,
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,500
EFTC Corporation,
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ . . . . . . . . . . . . . . . . . . . . . . . 5,000
EFTC Corporation,
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ . . . . . . . . . . . . . . . . . . . . . . . . 5,000
EFTC Corporation,
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Selling Shareholders Total . . . . . . . . . . . . . . . . . . 500,000
-------
Total . . . . . . . . . . . . . . . . . . . . . . 600,000
=======
2
41
SCHEDULE IV
Subsidiaries
Current Electronics, Inc.
Circuit Test, Inc.
Circuit Test International, L.C.
Airhub Services Group, L.C.
42
SCHEDULE V
Registration Rights Shareholders
▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. Shirozi
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇ Hewitzon
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇. Grantor Retained
Income Trust u/a/d 12/31/89.
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ Inc.
43
SCHEDULE VI
Shareholders Providing Letter Set Forth
in Exhibit A
Name Lock-up period
---- --------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇. 360 days
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇. 360 days
August ▇. ▇▇▇▇▇▇▇▇▇ 180 days
▇▇▇▇ ▇▇▇▇▇▇▇▇ 180 days
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 180 days
▇▇▇▇▇▇ ▇▇▇▇▇ 180 days
▇▇▇▇▇ ▇. ▇▇▇▇▇ 180 days
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ 180 days
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 360 days
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 360 days
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 360 days
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ 180 days
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 360 days
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 180 days
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 180 days
▇▇▇▇▇▇ ▇. ▇▇▇▇ 360 days
▇▇▇▇▇▇▇ ▇. ▇▇▇▇ 360 days
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 180 days
▇▇▇▇▇ ▇▇▇▇▇▇ 180 days
▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇ 180 days
44
SCHEDULE VII
Exercising Selling Shareholders
NAME OF EXERCISING SELLING DATE OF TYPE OF NUMBER OF EXERCISE
SHAREHOLDER ▇▇▇▇▇ ▇▇▇▇▇ SHARES PRICE
-------------------------- ------- ------- --------- --------
[TO BE PROVIDED BY EFTC/HOLME ▇▇▇▇▇▇▇ & ▇▇▇▇]
45
EXHIBIT A
[Letterhead of officer, director or major shareholder of
EFTC Corporation]
EFTC Corporation
Public Offering of Common Stock
, 1997
Salomon Brothers Inc
▇.▇. ▇▇▇▇▇▇▇▇ & Co.
Pacific Crest Securities Inc.
As Representatives of the several Underwriters,
c/o Salomon Brothers Inc
Seven ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
This letter is being delivered to you in connection with the
proposed Underwriting Agreement (the "Underwriting Agreement"), between EFTC
Corporation, a Colorado corporation (the "Company"), the Selling Shareholders
(as specified in the Underwriting Agreement) and each of you as representatives
of a group of Underwriters named therein, relating to an underwritten public
offering of Common Stock, $0.01 par value (the "Common Stock"), of the Company.
In order to induce you and the other Underwriters to enter
into the Underwriting Agreement, the undersigned will not, without the prior
written consent of Salomon Brothers Inc, offer, sell, contract to sell, pledge
or otherwise dispose of, or file a registration statement with the Commission
in respect of, or establish or increase a put equivalent position or liquidate
or decrease a call equivalent position within the meaning of Section 16 of the
Securities Exchange Act of 1934, as amended, with respect to, any shares of
capital stock of the Company or any securities convertible into or exercisable
or exchangeable for such capital stock, or publicly announce an intention to
effect any such transaction, for a period of [180/360] days after the date of
this Agreement, other than (i) any shares of Common Stock to be sold pursuant
to the Underwriting Agreement, (ii) any option or warrant or the conversion of
a security outstanding on the date hereof and referred to in the prospectus to
which the Underwriting Agreement relates and (iii) shares of Common Stock
disposed of as bona fide gifts approved by Salomon Brothers Inc.
46
If for any reason the Underwriting Agreement shall be
terminated prior to the Closing Date (as defined in the Underwriting
Agreement), the agreement set forth above shall likewise be terminated.
Yours very truly,
[Signature of officer, director or
major shareholder]
[Name and address of officer, director
or major shareholder]
2
47
EXHIBIT B
---------------------------------
(Name of Selling Stockholder)
CUSTODY AGREEMENT AND POWER OF ATTORNEY
for Sale of Common Stock of
EFTC CORPORATION
____________________________________
(each as Attorney-in-Fact as provided hereunder)
c/o
____________________________________
(as Custodian as provided hereunder)
Ladies and Gentlemen:
The undersigned (a "Selling Stockholder"; one of the several
"Selling Shareholders" named in the Underwriting Agreement referred to below)
proposes to sell certain shares of common stock, $.01 par value per share (the
"Common Stock"), of EFTC Corporation, a Colorado corporation (the "Company"),
to the Underwriters (the "Underwriters") for whom Salomon Brothers Inc, ▇.▇.
▇▇▇▇▇▇▇▇ & Co. and Pacific Crest Securities Inc. will act as representatives
(the "Representatives") for distribution under a Registration Statement on Form
S-2 (the "Registration Statement") to the public at a price and on terms to be
hereafter determined. It is understood that at this time there is no
commitment on the part of the Underwriters to purchase any shares of Common
Stock and no assurance that an offering of Common Stock will take place. The
shares of Common Stock that the undersigned proposes to sell to the
Underwriters pursuant to the Underwriting Agreement either as "Underwritten
Securities" or "Option Securities" within the meaning of the Underwriting
Agreement are referred to herein as the "Shares".
1. Appointment and Powers of Attorney-in-Fact.
A. The undersigned hereby irrevocably constitutes and
appoints _______________ and ______________ as the undersigned's agent and
attorney-in-fact (each, the "Attorney-in-Fact"), each with full power and
authority to act without the other and with full power of substitution to each,
with respect to all matters arising in connection with the public offering and
sale of the Shares, including, but not limited to, the power and authority on
behalf of the undersigned to do or cause to be done any of the following
things:
48
(i) execute and deliver on behalf of the undersigned an
underwriting agreement (the "Underwriting Agreement"), substantially in the
form of the draft dated November ____, 1997, delivered to the undersigned
herewith, receipt of which is acknowledged, but with such insertions, changes,
additions (including the price at which the Shares will be initially offered to
the public by the Underwriters and the underwriting discount to be received by
the Underwriters) or deletions as the Attorney-in-Fact, acting in his sole
discretion, shall approve, which approval shall be conclusively evidenced by
his execution of the Underwriting Agreement, including the exercise of all
authority thereunder vested in the undersigned;
(ii) sell, assign, transfer and deliver the Shares to
the Underwriters pursuant to the Underwriting Agreement and deliver to the
Underwriters certificates for the Shares so sold (the price for such shares to
be the price specified in Section 2 of the Underwriting Agreement);
(iii) endorse (in blank or otherwise) on behalf of the
undersigned the certificate or certificates for the Shares to be sold by the
undersigned pursuant to the Underwriting Agreement or to execute and deliver a
stock power or powers with respect to such certificates;
(iv) take any and all steps deemed necessary or
desirable by the Attorney-in-Fact in connection with the registration of the
Shares under the Securities Act of 1933, as amended (the "Securities Act" ),
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and under
the securities or "blue sky" laws of various states and jurisdictions,
including, without limitation, the giving or making of such undertakings,
representations and agreements and the taking of such other steps as the
Attorney-in-Fact may deem necessary or advisable;
(v) instruct the Company and the Custodian, as
hereinafter defined, on all matters pertaining to the sale of the Shares and
delivery of certificates therefor;
(vi) make any assurances, communications and reports
(including in the form of a signed certificate pursuant to Section VI.F. of the
Underwriting Agreement) for and on behalf of the undersigned to the
Underwriters, which may be necessary or advisable for facilitating the sale of
the Shares, or to appropriate state or governmental authorities, which may be
necessary or advisable for effecting the registration of the Shares under the
state securities or blue sky laws;
(vii) provide, in accordance with the Underwriting
Agreement, for the payment of certain expenses of the offering and sale of the
Common Stock covered by the Registration Statement;
(viii) to exercise any power conferred upon, and to
take any action authorized to be taken by, the undersigned pursuant to the
Underwriting Agreement, in the sole discretion of the Attorney-in-Fact;
2
49
(ix) certify on behalf of the undersigned to any
transfer agent or registrar such instruction and such assurance of the
genuineness of any document as may be reasonably required in connection with
the consummation of the proposed sale of the Shares; and
(x) otherwise take all actions and do all things
necessary or proper, required, contemplated or deemed advisable or desirable by
the Attorney-in-Fact in his discretion, including the execution and delivery of
any documents, and generally act for and in the name of the undersigned with
respect to the sale of the Shares to the Underwriters and the reoffering of the
Shares by the Underwriters as fully as could the undersigned if then personally
present and acting.
B. Each Attorney-in-Fact may act alone in exercising the rights
and powers conferred on the Attorney-in-Fact by this Custody Agreement and
Power of Attorney (the "Agreement"). Each Attorney-in-Fact is hereby empowered
to determine individually, in his sole and absolute discretion, the time or
times when, the purposes for which, and the manner in which, any power herein
conferred upon the Attorney-in-Fact shall be exercised.
C. The Custodian (as defined below), the Underwriters, the
Company and all other persons dealing with the Attorney-in-Fact as such may
rely and act upon any writing believed in good faith to be signed by the
Attorney-in-Fact.
D. The Attorney-in-Fact shall not receive any compensation for
his services rendered hereunder, except that he shall be entitled to cause the
Custodian to pay, from the proceeds payable to the undersigned, the
undersigned's proportionate share of any out-of-pocket expenses incurred under
this Agreement.
2. Appointment of Custodian; Deposit of Shares.
A. In connection with and to facilitate the sale of the Shares
to the Underwriters, the undersigned hereby appoints ______________ as
custodian (the "Custodian") and herewith deposits with the Custodian one or
more certificates for Common Stock that in the aggregate represent not less
than the excess, if any, of (a) the total number of Shares to be sold by the
undersigned to the Underwriters, as Underwritten Securities and Option
Securities, the number of such securities being set forth on Schedules II and
III to the Underwriting Agreement over (b) the total number of Shares to be
delivered by the Company to the Custodian pursuant to the Irrevocable
Instructions (as defined below). Each such certificate so deposited on the
date hereof is in negotiable and proper deliverable form, endorsed in blank
with the signature of the undersigned or the Attorney-in-Fact thereon
guaranteed by a commercial bank or trust company in the United States or by a
member firm of the New York Stock Exchange, or is accompanied by a duly
executed stock power or powers in blank, bearing the signature of the
undersigned or the Attorney-in-Fact so guaranteed. The undersigned will
deliver irrevocable instructions to the Company directing the Company to
deposit any of the undersigned's Exercise Securities (as defined in the
Underwriting Agreement) with the Custodian not later than the business day next
following the date hereof (the "Irrevocable Instructions"). Each such
certificate to be deposited by the Company pursuant to the Irrevocable
Instructions will be, at the time of deposit with the
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50
Custodian, in negotiable and proper deliverable form, endorsed in blank with
the signature of the undersigned or the Attorney-in-Fact thereon guaranteed by
a commercial bank or trust company in the United States or by a member firm of
the New York Stock Exchange, or will be accompanied by a duly executed stock
power or powers in blank, bearing the signature of the undersigned or the
Attorney-in-Fact so guaranteed. Upon reasonable request of the Custodian, the
undersigned agrees to furnish, or cause to be furnished, any other
documentation reasonably necessary to assure the sale and transfer of deposited
Shares to the Underwriters pursuant to the Underwriting Agreement. The
Custodian is hereby authorized and directed, subject to the instructions of the
Attorney-in-Fact, (a) to hold in custody the certificate or certificates
deposited herewith (or deposited hereafter by the Company pursuant to the
Irrevocable Instructions), (b) to deliver (or to authorize the Company's
transfer agent to deliver) the certificate or certificates deposited hereunder
(or deposited hereafter by the Company pursuant to the Irrevocable
Instructions) (or replacement certificate(s) for the Shares) to or at the
direction of the Attorney-in-Fact in accordance with the terms of the
Underwriting Agreement and (c) to return (or cause the Company's transfer agent
to return) to the undersigned new certificate(s) for the shares of Common Stock
represented by any certificate deposited hereunder (or deposited hereafter by
the Company pursuant to the Irrevocable Instructions) which are not sold
pursuant to the Underwriting Agreement. The Custodian shall be entitled to
customary compensation for the services to be rendered hereunder as set forth
in Schedule II attached hereto. Such compensation shall be paid to the
Custodian by the Company.
B. Until the Shares have been delivered to the Underwriters
against payment therefor in accordance with the Underwriting Agreement, the
undersigned shall retain all rights of ownership with respect to the Shares
deposited hereunder, including the right to vote and to receive all dividends
and payment thereon, except the right to retain custody of or dispose of such
Shares, which right is subject to this Agreement, a lock-up agreement among the
undersigned and the Underwriters, the Irrevocable Instructions and the
Underwriting Agreement.
3. Sale of Shares; Remitting Net Proceeds.
A. The Attorney-in-Fact is hereby authorized and directed to
deliver or cause the Custodian or the Company's transfer agent to deliver
certificates for the Shares to the Representatives, as provided in the
Underwriting Agreement, against delivery to the Attorney-in-Fact for the
accounts of the undersigned of the purchase price of the Shares (or, in the
case of the delivery of the Exercise Securities, the excess, if any, of the
aggregate purchase price of the Exercise Securities being sold by the
undersigned over the aggregate exercise price of the related options listed in
Schedule VII to the Underwriting Agreement), at the time and in the funds
specified in the Underwriting Agreement. The Attorney-in-Fact is authorized,
on behalf of the undersigned, to accept and acknowledge receipt of the payment
of the purchase price for the Shares (or, in the case of Exercise Securities,
the excess, if any, of the aggregate purchase price of the Exercise Securities
being sold by the undersigned over the aggregate exercise price of the related
options listed in Schedule VII to the Underwriting Agreement) and shall
promptly deposit such proceeds with the Custodian. After reserving an amount
of such proceeds as provided below, the Custodian shall promptly remit to the
undersigned the undersigned's proportionate share of the proceeds.
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B. Before any proceeds of the sale of the Shares are remitted
to the undersigned, the Attorney-in-Fact is authorized and empowered to direct
the Custodian to reserve from the proceeds an amount determined by the
Attorney-in-Fact to be sufficient to pay the expenses of the Selling
Stockholder, including those items of expense of the offering and sale of the
Common Stock to be borne by it as provided in the Underwriting Agreement. The
Custodian is authorized to pay such amount to discharge in full such expenses
from the amount reserved for that purpose pursuant to the written direction of
the Attorney-in-Fact. After payment of expenses from this reserve, the
Custodian will remit to the undersigned any balance. To the extent expenses
exceed the amount reserved, the Selling Stockholder shall remain liable for
such expenses. In no event will the Custodian be liable for any payments in
excess of the proceeds from the sale of the Shares.
4. Representations, Warranties and Agreements. The undersigned
represents and warrants to, and agrees with, the Company, the Attorney-in-Fact,
the Custodian, and the Underwriters as follows:
A. The undersigned has full legal right, capacity, power and
authority to enter into and perform this Agreement and the Underwriting
Agreement and to give the Irrevocable Instructions, and to sell, transfer,
assign and deliver the Shares to be sold by it pursuant to the Underwriting
Agreement, free and clear of all liens, encumbrances, equities and claims
whatsoever. If the undersigned is acting as a fiduciary, officer, partner, or
agent of a Selling Stockholder, the undersigned is enclosing with this
Agreement certified copies of the appropriate instruments pursuant to which the
undersigned is authorized to act hereunder.
B. The undersigned has reviewed the representations and
warranties to be made by the undersigned as a Selling Stockholder contained in
the Underwriting Agreement, and hereby represents, warrants and covenants that
each of such representations and warranties is true and correct as of the date
hereof and, except as the undersigned shall have notified the Attorney-in-Fact
and Salomon Brothers Inc pursuant to paragraph F of the attached instructions,
will be true and correct at all times from the date hereof through and
including the time of the closing of the sale of the Shares to the Underwriters
(including any closing pursuant to the exercise by the Underwriters of the
over-allotment option described in the Underwriting Agreement). The
undersigned will promptly notify the Attorney-in-Fact of any development that
would make any such representation or warranty untrue.
C. The undersigned has no reason to believe that the
representations and warranties of the Company contained in the Underwriting
Agreement are not true and correct, is familiar with the Registration Statement
and has no knowledge of any material fact, condition or information not
disclosed in the Prospectus or any supplement thereto which has adversely
affected or may adversely affect the business of the Company or any of its
subsidiaries; and the sale of the Shares by the Selling Stockholder pursuant to
the Underwriting Agreement is not prompted by any information concerning the
Company or any of its subsidiaries that is not set forth in the Prospectus or
any supplement thereto.
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D. The undersigned is not directly or indirectly an affiliate
of or associated with any member of the National Association of Securities
Dealers, Inc.
E. Upon execution and delivery of the Underwriting Agreement by
the undersigned, the undersigned agrees to indemnify and hold harmless the
Company, each of its directors, each of its officers who signs the Registration
Statement, each Underwriter and each person who controls the Company or any
Underwriter, and to contribute to amounts paid as a result of losses, claims,
damages, liabilities and expenses, as provided in Section VIII. of the
Underwriting Agreement.
F. Upon execution and delivery of the Underwriting Agreement by
the undersigned, (or the Attorney-in-Fact), the undersigned agrees that it
will be bound by, and will perform each of the covenants and agreements made by
the undersigned as a Selling Stockholder in the Underwriting Agreement.
G. The undersigned agrees to deliver to the Attorney-in-Fact
such documentation as the Attorney-in-Fact, the Company or the Underwriters or
any of their respective counsel may reasonably request in order to effectuate
any of the provisions hereof or of the Underwriting Agreement, all of the
foregoing to be in form and substance satisfactory in all respects to the
requesting party.
The foregoing representations, warranties and agreements are made for the
benefit of, and may be relied upon by, the Attorney-in-Fact, the Company, the
Custodian, the Underwriters and their respective representatives, agents and
counsel and are in addition to, and not in limitation of, the representations,
warranties and agreements of the Selling Stockholder in the Underwriting
Agreement.
5. Irrevocability of Instruments; Termination of this Agreement.
A. This Agreement, the deposit of the Shares pursuant hereto
and all authority hereby conferred, is granted, made and conferred subject to
and in consideration of (i) the interests of the Attorney-in-Fact, the
Underwriters and the Company in and for the purpose of completing the
transactions contemplated hereunder and by the Irrevocable Instructions and the
Underwriting Agreement and (ii) the completion of the registration of Common
Stock pursuant to the Registration Statement and the other acts of the
above-mentioned parties from the date hereof to and including the execution and
delivery of the Underwriting Agreement in anticipation of the sale of Common
Stock, including the Shares, to the Underwriters; and the Attorney-in-Fact is
hereby further vested with an estate, right, title and interest in and to the
Shares deposited herewith for the purpose of irrevocably empowering and
securing to him authority sufficient to consummate said transactions.
Accordingly, this Agreement shall be irrevocable prior to the Closing Date (as
defined in the Underwriting Agreement), and shall remain in full force and
effect until that date. The undersigned further agrees that this Agreement
shall not be terminated by operation of law or upon the occurrence of any event
whatsoever, including the death, disability or incompetence of any of the
undersigned; or if this Agreement is executed on behalf of a trust,
corporation, partnership or other entity, it shall not be terminated by
liquidation,
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53
dissolution, winding-up, or any other event affecting the legal life of such
entity, or by the occurrence of any other event or events. If any event
referred to in the preceding sentence shall occur, whether with or without
notice thereof to the Attorney-in-Fact, the Company, the Custodian, the
Underwriters or any other person, the Attorney-in-Fact and the Custodian shall
nevertheless be authorized and empowered to deliver and deal with the Shares
deposited under the Agreement by the undersigned in accordance with the terms
and provisions of the Underwriting Agreement and this Agreement as if such
event had not occurred.
B. If the sale of the Shares contemplated by this Agreement
(excluding any sale pursuant to the exercise by the Underwriters of the
over-allotment option described in the Underwriting Agreement) is not completed
by the Closing Date, this Agreement shall terminate (without affecting any
lawful action of the Attorney-in-Fact or the Custodian prior to such
termination or the agreement hereunder of the undersigned to indemnify the
Attorney-in-Fact and the Custodian), and the Attorney-in-Fact shall cause the
Custodian to return to the undersigned all certificates for the Shares
deposited hereunder, but only after having received payment of any expenses to
be paid or borne by the Selling Stockholder. The undersigned hereby covenants
with the Attorney-in-Fact that if for any reason the sale of the Shares
contemplated hereby shall not be consummated, the undersigned shall pay all
expenses payable by such Selling Stockholder hereunder or under the
Underwriting Agreement.
6. Liability and Indemnification of the Attorney-in-Fact and
Custodian. The Attorney-in-Fact and the Custodian assume no responsibility or
liability to the undersigned or to any other person, other than to deal with
the Shares, the proceeds from the sale of the Shares and any other shares of
Common Stock deposited with the Custodian pursuant to the terms of this
Agreement in accordance with the provisions hereof. The duties and obligations
of the Custodian shall be limited to and determined solely by the express
provisions of this Agreement, and no implied duties or obligations shall be
read into this Agreement against the Custodian. The undersigned hereby agrees
to indemnify and hold harmless the Attorney-in-Fact and the Custodian, and
their respective officers, agents, successors, assigns and personal
representatives with respect to any act or omission of or by any of them in
good faith in connection with any and all matters within the scope of this
Agreement or the Underwriting Agreement; provided, however, that the
Attorney-in-Fact and the Custodian may be liable to the undersigned for any
such act or omission to the extent attributable to gross negligence or fraud.
The Custodian may consult with counsel of its own choice and shall have full
and complete authorization and protection for any action taken or suffered by
it hereunder in good faith and in accordance with the opinion of such counsel.
7. Interpretation.
A. The representations, warranties and agreements of the
undersigned contained herein and in the Underwriting Agreement shall survive
the sale and delivery of the Shares and the termination of this Agreement.
B. The validity, enforceability, interpretation and
construction of this Agreement shall be determined in accordance with the laws
of the State of New York applicable to contracts
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54
made and to be performed within the State of New York, and this Agreement shall
inure to the benefit of, and be binding upon, the undersigned and the
undersigned's heirs, executors, administrators, successors and assigns, as the
case may be.
C. Wherever possible each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any such provision shall be prohibited by or invalid under applicable
law, it shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.
D. The use of the masculine gender in this Agreement includes
the feminine and neuter, and the use of the singular includes the plural,
wherever appropriate.
E. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered, shall constitute an
original and all together shall constitute one instrument.
F. This Agreement shall be binding upon, inure to the benefit
of, and be enforceable by and against, the respective successors, heirs,
personal representatives and assigns of the parties hereto.
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55
IN WITNESS WHEREOF, the undersigned has executed this Custody Agreement
and Power of Attorney this ___ day of ________, 1997.
[Selling Stockholder] Guaranteed by:*
---------------------------------------------------- ---------------------------------------------------
Name: Name:
(Please sign exactly as your Stockholder name appear
on your stock certificate(s).)
Name and address to which notices and funds shall be
sent.
----------------------------------------------------
(NAME)
----------------------------------------------------
(STREET)
----------------------------------------------------
(CITY) (STATE) (ZIP)
* (NOTE: The signature of the Selling Stockholder must be guaranteed by a commercial bank or trust company in the United
States or by a member of the New York Stock Exchange.)
ACCEPTED by the Attorney-in-Fact ACCEPTED by the Custodian
as of the date above set forth: as of the date above set forth:
------------------------------ ----------------------------------
By:
------------------------------ -------------------------------
SEE THE ATTACHED INSTRUCTIONS
56
INSTRUCTIONS
(For completing the Custody Agreement and Power of Attorney)
A. You have been sent five copies of the Custody Agreement and Power
of Attorney (the "Agreement"). Please complete and return four copies of the
Agreement and stock certificate(s) as set forth in paragraph D below. A fully
executed copy of the Agreement will be returned to you; a fully executed copy
of the Agreement and your stock certificate(s) will be retained by the
Custodian; and a fully executed copy of the Agreement will be delivered to the
Attorney-in-Fact and to counsel for the Underwriters.
B. Complete Schedule I attached hereto.
C. Unless such stock certificate(s) are endorsed or the stock
power(s) attached thereto are executed by the Attorney-in-Fact as provided in
the Agreement, each stock certificate or stock power deposited hereunder must
be executed by you with your signature on the stock certificate(s) or the
accompanying stock power(s) guaranteed by a commercial bank or trust company in
the United States or by any member of the New York Stock Exchange. Please sign
the stock certificate(s) or stock power(s) and the Agreement exactly as your
name appears on your stock certificate(s).
D. Endorsed stock certificate(s) or stock certificate(s) with stock
powers attached along with all four executed copies of the completed Agreement
should be promptly returned by you (or the Attorney-in-Fact as provided in the
Agreement) by hand delivery or by certified mail appropriately insured to:
American Securities Transfer & Trust, Inc.
[address of custodian
Attn: ]
If sent through the mail, it is recommended that the certificate(s) not be
endorsed, but an executed stock power be sent under separate cover from the
certificate(s).
E. If any certificate that you submit represents a greater number of
Shares than the aggregate number of Shares that you agree to sell pursuant to
the Underwriting Agreement, the Custodian will cause to be delivered to you in
due course, but not earlier than ten days after the final closing for the
purchase of Shares by the Underwriters pursuant to the exercise by the
Underwriters of the over-allotment option described in the Underwriting
Agreement, a certificate for the excess number of shares.
F. For purposes of discharging your obligations under Section VI.F. of
the Underwriting Agreement and Section 4B of the Custody Agreement and Power of
Attorney please contact ▇▇▇▇▇ ▇▇▇▇▇▇▇ of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc by phone at (212)
▇▇▇-▇▇▇▇ or by facsimile at (▇▇▇) ▇▇▇-▇▇▇▇ if any information or representation
included in the foregoing Agreement or the Underwriting Agreement should
change, or if you become aware of any new information, at any time prior to
termination of the period applicable to you referred to in Section VI.I. of the
Underwriting Agreement.
57
---------------------------------
(Name of Selling Stockholder)
SCHEDULE I
Certificate(s) for Shares of Common Stock of
EFTC CORPORATION
deposited under the
Custody Agreement and Power of Attorney
and by the Company pursuant to the Irrevocable Instructions
Number of Shares of Number of Shares of
Common Stock Common Stock Deposited
Number of Shares of Deposited under the by the Company
Common Stock Custody Agreement and Pursuant to the Number of Shares of
Represented by Power of Irrevocable Common Stock from This
Certificate Number Certificate Attorney Instructions Certificate To Be Sold
------------------ ------------------- --------------------- ---------------------- ----------------------
* If fewer than all shares represented by a certificate are to be sold,
indicate below, if desired for income tax purposes, the date of purchase
or purchase price of the particular shares to be sold.
58
SCHEDULE II
Fees of Custodian
Custodial Fees ....................................
Wire Transfer Fees ................................
2
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EXHIBIT C
Irrevocable Stock Option Exercise Notice
EFTC Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Salomon Brothers Inc
Seven ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
With respect to the options described on Exhibit A hereto, the
undersigned hereby irrevocably exercises the option to purchase an aggregate of
____ shares of EFTC Corporation ("EFTC") common stock, $0.01 par value and
irrevocably instructs EFTC to deliver such shares to American Securities
Transfer & Trust, Inc. ("AST"), acting as Custodian pursuant to the Custody
Agreement and Power of Attorney dated November ___, 1997 (the "Custody
Agreement"). Such shares shall be held by AST, as Custodian, pursuant to the
Custody Agreement. I hereby irrevocably authorize Salomon Brothers Inc
("Salomon") to tender payment to EFTC of $________ which consists of the
exercise price of these options and all applicable taxes due. I hereby
acknowledge that Salomon has an interest in the exercise of these options and
delivery of the shares issued thereunder to AST, acting as Custodian, and is
relying on such exercise and delivery in executing the Underwriting Agreement
dated November ___, 1997 between EFTC and the Underwriters (as defined
therein).
Date: November , 1997
--
----------------------------------
Signature
Please print:
----------------------------------
Name
----------------------------------
----------------------------------
Address
----------------------------------
Social Security Number
60
Exhibit A
Date of Grant Type of Grant Number of Shares Exercise Price
------------- ------------- ---------------- --------------
2