Pericom Semiconductor Corporation
2,200,000 Shares
Common Stock
UNDERWRITING AGREEMENT
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March __, 2000
PRUDENTIAL SECURITIES INCORPORATED
CIBC World Markets Corp.
SoundView Technology Group, Inc.
▇.▇. ▇▇▇▇▇▇▇▇▇, Towbin
As Representatives of the Several Underwriters
c/o Prudential Securities Incorporated
▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Pericom Semiconductor Corporation, a California corporation (the
"Company"), and certain shareholders of the Company named in Schedule II hereto
(the "Selling Securityholders") hereby confirm their agreements with the several
underwriters named in Schedule I hereto (the "Underwriters"), for whom you have
been duly authorized to act as representatives (in such capacities, the
"Representatives"), as set forth below. If you are the only Underwriters, all
references herein to the Representatives shall be deemed to be to the
Underwriters.
1. Securities. Subject to the terms and conditions herein contained, the
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Company proposes to issue and sell to the several Underwriters an aggregate of
2,200,000 shares (the "Firm Securities") of the Company's Common Stock, no par
value ("Common Stock"). The Company and the Selling Securityholders also
propose to issue and sell to the several Underwriters not more than 330,000
additional shares of Common Stock if requested by the Representatives as
provided in Section 4 of this Agreement. Any and all shares of Common Stock to
be purchased by the Underwriters pursuant to such option are referred to herein
as the "Option Securities", and the Firm Securities and any Option Securities
are collectively referred to herein as the "Securities".
2. Representations and Warranties of the Company. The Company represents
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and warrants to, and agrees with, each of the several Underwriters that :
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act of 1933, as amended (the "Act"). A registration statement on
such Form (File No. 333-30412) with respect to the Securities, including a
prospectus subject to completion, has been filed by the Company with the
Securities and Exchange Commission (the "Commission") under the Act, and one or
more amendments to such registration statement may have been so filed. After
the execution of this Agreement, the Company will file with the Commission
either (i) if such registration statement, as it may have been amended, has been
declared by the Commission to
be effective under the Act, either (A) if the Company relies on Rule 434 under
the Act, a Term Sheet (as hereinafter defined) relating to the Securities, that
shall identify the Preliminary Prospectus (as hereinafter defined) that it
supplements and, if required to be filed pursuant to Rules 434(c)(2) and 424(b),
an Integrated Prospectus (as hereinafter defined), in either case, containing
such information as is required or permitted by Rule 434, 430A and 424(b) under
the Act or (B) if the Company does not rely on Rule 434 under the Act, a
prospectus in the form most recently included in an amendment to such
registration statement (or, if no such amendment shall have been filed, in such
registration statement), with such changes or insertions as are required by Rule
430A under the Act or permitted by Rule 424(b) under the Act, and in the case of
clause (i)(A) or (i)(B) of this sentence as have been provided to and approved
by the Representatives prior to the execution of this Agreement, or (ii) if such
registration statement, as it may have been amended, has not been declared by
the Commission to be effective under the Act, an amendment to such registration
statement, including a form of prospectus, a copy of which amendment has been
furnished to and approved by the Representatives prior to the execution of this
Agreement. The Company may also file a related registration statement with the
Commission pursuant to Rule 462(b) under the Act for the purpose of registering
certain additional Securities, which registration shall be effective upon filing
with the Commission. As used in this Agreement, the term "Original Registration
Statement" means the registration statement initially filed relating to the
Securities, as amended at the time when it was or is declared effective,
including (A) all financial schedules and exhibits thereto, (B) all documents
(or portions thereof) incorporated by reference therein filed under the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and (C) any
information omitted therefrom pursuant to Rule 430A under the Act and included
in the Prospectus (as hereinafter defined) or, if required to be filed pursuant
to Rule 434(c)(2) and 424(b), in the Integrated Prospectus; the term "Rule
462(b) Registration Statement" means any registration statement filed with the
Commission pursuant to Rule 462(b) under the Act (including the Registration
Statement and any Preliminary Prospectus or Prospectus incorporated therein at
the time such Registration Statement becomes effective); the term "Registration
Statement" includes both the Original Registration Statement and any Rule 462(b)
Registration Statement; the term "Preliminary Prospectus" means each prospectus
subject to completion filed with such registration statement or any amendment
thereto (including the prospectus subject to completion, if any, included in the
Registration Statement or any amendment thereto at the time it was or is
declared effective), including all documents (or portions thereof) incorporated
by reference therein filed under the Exchange Act; the term "Prospectus" means:
(A) if the Company relies on Rule 434 under the Act, the Term Sheet
relating to the Securities that is first filed pursuant to Rule 424(b)(7)
under the Act, together with the Preliminary Prospectus identified therein
that such Term Sheet supplements:
(B) if the Company does not rely on Rule 434 under the Act, the prospectus
first filed with the Commission pursuant to Rule 424(b) under the Act; or
(C) if the Company does not rely on Rule 434 under the Act and if no
prospectus is required to be filed pursuant to Rule 424(b) under the Act,
the prospectus included in the Registration Statement, including, in the
case of clauses (A), (B) or (C) of this sentence, all documents (or
portions thereof) incorporated by reference therein filed under the
Exchange Act; the term "Integrated Prospectus" means a prospectus first
filed with the Commission pursuant to Rules 434(c)(2) and 424(b) under the
Act; and the term "Term Sheet" means any abbreviated term sheet that
satisfies the requirements of Rule 434 under the Act. Any reference in
this Agreement to an "amendment or supplement" to any Preliminary
Prospectus or the Prospectus or any Integrated Prospectus or an
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"amendment" to any registration statement (including the Registration
Statement) shall be deemed to include any document incorporated by
reference therein that is filed with the Commission under the Exchange Act
after the date of such Preliminary Prospectus, Prospectus, Integrated
Prospectus or registration statement, as the case may be; any reference
herein to the "date" of a Prospectus that includes a Term Sheet shall mean
the date of such Term Sheet. For purposes of the preceding sentence, any
reference to the "effective date" of an amendment to a registration
statement shall, if such amendment is effected by means of the filing with
the Commission under the Exchange Act of a document incorporated by
reference in such registration statement, be deemed to refer to the date on
which such document was so filed with the Commission.
(b) The Commission has not issued any order preventing or suspending the
use of any Preliminary Prospectus. When any Preliminary Prospectus and any
amendment or supplement thereto was filed with the Commission, it (i) contained
all statements required to be stated therein in accordance with, and complied in
all material respects with the requirements of, the Act, the Exchange Act and
the respective rules and regulations of the Commission thereunder, and (ii) did
not include any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. When the
Registration Statement or any amendment thereto was or is declared effective, it
(i) contained or will contain all statements required to be stated therein in
accordance with, and complied or will comply in all material respects with the
requirements of, the Act, the Exchange Act and the respective rules and
regulations of the Commission thereunder and (ii) did not or will not include
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading. When the Prospectus or
any Term Sheet that is a part thereof or any Integrated Prospectus or any
amendment or supplement to the Prospectus is filed with the Commission pursuant
to Rule 424(b) (or, if the Prospectus or part thereof or such amendment or
supplement is not required to be so filed, when the Registration Statement or
the amendment thereto containing such amendment or supplement to the Prospectus
was or is declared effective), on the date when the Prospectus is otherwise
amended or supplemented and on the Firm Closing Date and any Option Closing Date
(both as hereinafter defined), each of the Prospectus, and, if required to be
filed pursuant to Rules 434(c)(2) and 424(b) under the Act, the Integrated
Prospectus as amended or supplemented at any such time, (i) contained or will
contain all statements required to be stated therein in accordance with, and
complied or will comply in all material respects with the requirements of, the
Act, the Exchange Act and the respective rules and regulations of the Commission
thereunder and (ii) did not or will not include any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. The foregoing provisions of this paragraph (b) do not
apply to statements or omissions made in any Preliminary Prospectus or any
amendment or supplement thereto, the Registration Statement or any amendment
thereto or the Prospectus or, if required to be filed pursuant to Rules
434(c)(2) and 424(b) and the Act, the Integrated Prospectus or any amendment or
supplement thereto in reliance upon and in conformity with written information
furnished to the Company by any Underwriter through the Representatives
specifically for use therein.
(c) If the Company has elected to rely on Rule 462(b) and the Rule 462(b)
Registration Statement has not been declared effective (i) the Company has filed
a Rule 462(b) Registration Statement in compliance with and that is effective
upon filing pursuant to Rule 462(b) and has received confirmation of its receipt
and (ii) the Company has given irrevocable instructions for transmission of the
applicable filing fee in connection with the filing of the Rule 462(b)
Registration
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Statement, in compliance with Rule 111 promulgated under the Act or the
Commission has received payment of such filing fee.
(d) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of its jurisdiction of incorporation
and is duly qualified to transact business as a foreign corporation and is in
good standing under the laws of all other jurisdictions where the ownership or
leasing of its properties or the conduct of its business requires such
qualification, except where the failure to be so qualified does not amount to a
material liability or disability to the Company.
(e) The Company has power (corporate and other) to own or lease its
properties and conduct its business as described in the Registration Statement
and each of the Prospectus and any Integrated Prospectus or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus; and the Company has
full power (corporate and other) to enter into this Agreement and to carry out
all the terms and provisions hereof to be carried out by it.
(f) Except as described in the Registration Statement and each of the
Prospectus and any Integrated Prospectus or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus, the Company does not own or
control, directly or indirectly, any interest in any other corporation,
partnership, limited liability company, association, or other business entity.
(g) The Company has an authorized, issued and outstanding capitalization
as set forth in each of the Prospectus and any Integrated Prospectus or, if the
Prospectus and any required Integrated Prospectus are not in existence, the most
recent Preliminary Prospectus. All of the issued shares of capital stock of the
Company have been duly authorized and validly issued and are fully paid and
nonassessable. The Firm Securities and the Option Securities have been duly
authorized and at the Firm Closing Date or the related Option Closing Date (as
the case may be), after payment therefor in accordance herewith, will be validly
issued, fully paid and nonassessable. No holders of outstanding shares of
capital stock of the Company are entitled as such to any preemptive or other
rights to subscribe for any of the Securities, and no holder of securities of
the Company has any right which has not been fully exercised or waived to
require the Company to register the offer or sale of any securities owned by
such holder under the Act in the public offering contemplated by this agreement.
(h) The capital stock of the Company conforms to the description thereof
contained in each of the Prospectus and any Integrated Prospectus or, if the
Prospectus and any required Integrated Prospectus are not in existence, the most
recent Preliminary Prospectus.
(i) Except as disclosed in the Prospectus or each of the Prospectus and
any Integrated Prospectus (or, if the Prospectus and any required Integrated
Prospectus are not in existence, the most recent Preliminary Prospectus), there
are not outstanding (A) securities or obligations of the Company convertible
into or exchangeable for any capital stock of the Company, (B) warrants, rights
or options to subscribe for or purchase from the Company any such capital stock
or any such convertible or exchangeable securities or obligations, or (C)
obligations of the Company to issue any shares of capital stock, any such
convertible or exchangeable securities or obligations, or any such warrants,
rights or options.
(j) The financial statements and schedules of the Company included in the
Registration Statement and the Prospectus or each of the Prospectus and any
Integrated Prospectus (or, if the Prospectus and any required Integrated
Prospectus are not in existence, the most recent
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Preliminary Prospectus) fairly present the financial position of the Company and
the results of operations and changes in financial condition as of the dates and
periods therein specified. Such financial statements and schedules have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved (except as otherwise noted
therein). The selected financial data set forth under the caption "Selected
Financial Information" in the Prospectus or each of the Prospectus and any
Integrated Prospectus (or, if the Prospectus and any required Integrated
Prospectus are not in existence, the most recent Preliminary Prospectus) and in
the Company's Annual Report on Form 10-K for the fiscal year ended July 3, 1999,
fairly present, on the basis stated in each of the Prospectus and any Integrated
Prospectus (or such Preliminary Prospectus) and such Annual Report, the
information included therein.
(k) Deloitte & Touche LLP, who have certified certain financial statements
of the Company and delivered their report with respect to the audited financial
statements and schedules included in the Registration Statement, the Prospectus
and any Integrated Prospectus (or, if the Prospectus and any required Integrated
Prospectus are not in existence, the most recent Preliminary Prospectus), are
independent public accountants as required by the Act, the Exchange Act and the
related published rules and regulations thereunder.
(l) The execution and delivery of this Agreement have been duly authorized
by the Company and this Agreement has been duly executed and delivered by the
Company, and is the valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms.
(m) No legal or governmental proceedings are pending to which the Company
is a party or to which the property of the Company is subject that are required
to be described in the Registration Statement or the Prospectus or each of the
Prospectus and any Integrated Prospectus (or, if the Prospectus and any required
Integrated Prospectus are not in existence, the most recent Preliminary
Prospectus), and no such proceedings have been threatened against the Company or
with respect to any of its properties; and no contract or other document is
required to be described in the Registration Statement or the Prospectus or any
Integrated Prospectus or to be filed as an exhibit to the Registration Statement
that is not described therein (or, if the Prospectus and any required Integrated
Prospectus are not in existence, the most recent Preliminary Prospectus) or
filed as required.
(n) The issuance, offering and sale of the Securities to the Underwriters
by the Company pursuant to this Agreement, the compliance by the Company with
the other provisions of this Agreement and the consummation of the other
transactions herein contemplated do not (i) require the consent, approval,
authorization, registration or qualification of or with any governmental
authority, except such as have been obtained, such as may be required under
state securities or blue sky laws and, if the registration statement filed with
respect to the Securities (as amended) is not effective under the Act as of the
time of execution hereof, such as may be required (and shall be obtained as
provided in this Agreement) under the Act, or (ii) conflict with or result in a
breach or violation of any of the terms and provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, lease or other agreement
or instrument to which the Company is a party or by which the Company or any of
its properties are bound, or the charter documents or by-laws of the Company, or
any statute or any judgment, decree, order, rule or regulation of any court or
other governmental authority or any arbitrator applicable to the Company.
(o) Subsequent to the respective dates as of which information is given in
the Registration
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Statement, the Prospectus or any Integrated Prospectus or, if the Prospectus and
any required Integrated Prospectus are not in existence, the most recent
Preliminary Prospectus, and any required Integrated Prospectus are in existence,
the most recent Preliminary Prospectus, the Company has not sustained any
material loss or interference with its business or properties from fire, flood,
hurricane, accident or other calamity, whether or not covered by insurance, or
from any labor dispute or any legal or governmental proceeding and there has not
been any material adverse change, or any development involving a prospective
material adverse change, in the condition (financial or otherwise), management,
business, prospects, net worth, or results of operations of the Company, except
in each case as described in or contemplated by the Prospectus or, if each of
the Prospectus and any Integrated Prospectus or, if the Prospectus and any
required Integrated Prospectus are not in existence, the most recent Preliminary
Prospectus.
(p) The Company has not, directly or indirectly, (i) taken any action
designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Securities or (ii) since the filing of the Registration Statement (A) sold, bid
for, purchased, or paid anyone any compensation for soliciting purchases of, the
Securities or (B) paid or agreed to pay to any person any compensation for
soliciting another to purchase any other securities of the Company (except for
the sale of Securities by the Selling Securityholders under this Agreement).
(q) The Company has not distributed and, prior to the later of (i) the
Closing Date and (ii) the completion of the distribution of the Securities, will
not distribute any offering material in connection with the offering and sale of
the Securities other than the Registration Statement or any amendment thereto,
any Preliminary Prospectus or the Prospectus or any amendment or supplement
thereto, or other materials, if any, permitted by the Act.
(r) Subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus), (i) the Company has not
incurred any material liability or obligation, direct or contingent, nor entered
into any material transaction not in the ordinary course of business; (ii) the
Company has not purchased any of its outstanding capital stock, nor declared,
paid or otherwise made any dividend or distribution of any kind on its capital
stock; and (iii) there has not been any material change in the capital stock,
short-term debt or long-term debt of the Company, except in each case as
described in or contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
(s) The Company has good and marketable title in fee simple to all items
of real property and marketable title to all personal property owned by it, in
each case free and clear of any security interests, liens, encumbrances,
equities, claims and other defects, except such as do not materially and
adversely affect the value of such property and do not interfere with the use
made or proposed to be made of such property by the Company, and any real
property and buildings held under lease by the Company are held under valid,
subsisting and enforceable leases, with such exceptions as are not material and
do not interfere with the use made or proposed to be made of such property and
buildings by the Company, in each case except as described in or contemplated by
the Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(t) No labor dispute with the employees of the Company exists or is
threatened or imminent that could result in a material adverse change in the
condition (financial or otherwise),
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business, prospects, net worth or results of operations of the Company, except
as described in or contemplated by the Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus).
(u) The Company owns or possesses, or can acquire on reasonable terms, all
material patents, patent applications, trademarks, service marks, trade names,
licenses, copyrights and proprietary or other confidential information currently
employed by it in connection with its business, and the Company has not
received any notice of infringement of or conflict with asserted rights of any
third party with respect to any of the foregoing 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),
business, prospects, net worth or results of operations of the Company, except
as described in or contemplated by the Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus).
(v) The Company is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are prudent
and customary in the business in which it is engaged; the Company has been
refused any insurance coverage sought or applied for; and the Company has no
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 cost that
would not materially and adversely affect the condition (financial or
otherwise), business, prospects, net worth or results of operations of the
Company, except as described in or contemplated by the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus).
(w) [Intentionally omitted]
(x) The Company possesses all certificates, authorizations and permits
issued by the appropriate federal, state or foreign regulatory authorities
necessary to conduct business, and the Company has 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), business, prospects, net worth
or results of operations of the Company, except as described in or contemplated
by the Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(y) The Company will conduct its operations in a manner that will not
subject it to registration as an investment company under the Investment Company
Act of 1940, as amended, and this transaction will not cause the Company to
become an investment company subject to registration under such Act.
(z) 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 Company) 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 described in or
contemplated by the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus).
(aa) The Company is not in violation of any federal or state law or
regulation relating to occupational safety and health or to the storage,
handling or transportation of hazardous or
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toxic materials and the Company has received all permits, licenses or other
approvals required of it under applicable federal and state occupational safety
and health and environmental laws and regulations which are material to conduct
its business, and the Company is in compliance with all terms and conditions of
any such permit, license or approval, except any such violation of law or
regulation, failure to receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such permits, licenses or
approvals which would not, singly or in the aggregate, result in a material
adverse change in the condition (financial or otherwise), business, prospects,
net worth or results of operations of the Company, except as described in or
contemplated by the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus).
(bb) Each certificate signed by any officer of the Company and delivered
to the Representatives or counsel for the Underwriters shall be deemed to be a
representation and warranty by the Company to each Underwriter as to the matters
covered thereby.
(cc) The Company owns no shares of stock or any other equity securities
of any corporation or has any equity interest in any firm, partnership,
association or other entity, except as described in or contemplated by the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(dd) There are no holders of securities of the Company, who, by reason of
the filing of the Registration Statement, have the right (and have not waived
such right) to request the Company to register under the Act, or to include in
the Registration Statement, securities held by them.
(ee) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (1) transactions are executed in
accordance with management's general or specific authorizations; (2)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain asset accountability; (3) access to assets is permitted only in
accordance with management's general or specific authorization; and (4) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(ff) No default exists, and no event has occurred which, with notice or
lapse of time or both, would constitute a default in the due performance and
observance of any term, covenant or condition of any indenture, mortgage, deed
of trust, lease or other agreement or instrument to which the Company is a party
or by which the Company is bound or may result in any material adverse change,
or any development involving a prospective material adverse change, in the
condition (financial or otherwise), management, business, prospects, net worth,
or results of operations of the Company, except in each case as described in or
contemplated by the Prospectus or, if each of the Prospectus and any Integrated
Prospectus or, if the Prospectus and any required Integrated Prospectus are not
in existence, the most recent Preliminary Prospectus.
3. Representations and Warranties of the Selling Securityholders. Each
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Selling Securityholder, severally and not jointly, represents and warrants to,
and agrees with, each of the several Underwriters that:
(a) Such Selling Securityholder has full power to enter into this
Agreement and to sell,
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assign, transfer and deliver to the Underwriters the Securities to be sold by
such Selling Securityholder hereunder in accordance with the terms of this
Agreement, and this Agreement has been duly executed and delivered by such
Selling Securityholder.
(b) Such Selling Securityholder has duly executed and delivered a power
of attorney and custody agreement (with respect to such Selling Securityholder,
the "Power of Attorney" and the "Custody Agreement", respectively), each in the
form heretofore delivered to the Representatives, appointing ▇▇▇▇ ▇▇▇-▇▇▇▇ ▇▇▇
and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, and each of them, as such Selling Securityholder's
attorney in fact (the "Attorney in Fact") with authority to execute, deliver and
perform this Agreement on behalf of such Selling Securityholder and appointing
Bank Boston N.A. EquiServe as custodian thereunder (the "Custodian").
Certificates in negotiable form, endorsed in blank or accompanied by blank stock
bond powers duly executed, with signatures appropriately guaranteed,
representing the Securities to be sold by such Selling Securityholder hereunder
have been deposited with the Custodian pursuant to the Custody Agreement for the
purpose of delivery pursuant to this Agreement. Such Selling Securityholder has
full power to enter into the Custody Agreement and the Power of Attorney and to
perform its obligations under the Custody Agreement. The Custody Agreement and
the Power of Attorney have been duly executed and delivered by such Selling
Securityholder and, assuming due authorization, execution and delivery by the
Custodian, are the legal, valid, binding and enforceable instruments of such
Selling Securityholder. Such Selling Securityholder agrees that each of the
Securities represented by the certificates on deposit with the Custodian is
subject to the interests of the Underwriters hereunder, that the arrangements
made for such custody, the appointment of the Attorney in Fact and the right,
power and authority of the Attorney in Fact to execute and deliver this
Agreement, to agree on the price at which the Securities (including such Selling
Securityholder's Securities) are to be sold to the Underwriters, and to carry
out the terms of this Agreement, are to that extent irrevocable and that the
obligations of such Selling Securityholder hereunder shall not be terminated,
except as provided in this Agreement or the Custody Agreement, by any act of
such Selling Securityholder, by operation of law or otherwise, whether in the
case of any individual Selling Securityholder by the death or incapacity of such
Selling Securityholder, in the case of a trust or estate by the death of the
trustee or trustees or the executor or executors or the termination of such
trust or estate, or in the case of a corporate or partnership Selling
Securityholder by its liquidation or dissolution or by the occurrence of any
other event. If any individual Selling Securityholder, trustee or executor
should die or become incapacitated or any such trust should be terminated, or if
any corporate or partnership Selling Securityholder shall liquidate or dissolve,
or if any other event should occur, before the delivery of such Securities
hereunder, the certificates for such Securities deposited with the Custodian
shall be delivered by the Custodian in accordance with the respective terms and
conditions of this Agreement as if such death, incapacity, termination,
liquidation or dissolution or other event had not occurred, regardless of
whether or not the Custodian or the Attorney in Fact shall have received notice
thereof.
(c) Such Selling Securityholder is the lawful owner of the Securities
to be sold by such Selling Securityholder hereunder and upon sale and delivery
of, and payment for, such Securities, as provided herein, such Selling
Securityholder will convey good and marketable title to such Securities, free
and clear of any security interests, liens, encumbrances, equities, claims or
other defects.
(d) Such Selling Securityholder has not, directly or indirectly, (i)
taken any action designed to cause or result in, or that has constituted or
which might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to
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facilitate the sale or resale of the Securities or (ii) since the filing of the
Registration Statement (A) sold, bid for, purchased, or paid anyone any
compensation for soliciting purchases of, the Securities or (B) paid or agreed
to pay to any person any compensation for soliciting another to purchase any
other securities of the Company (except for the sale of Securities by the
Selling Securityholders under this Agreement.
(e) To the extent that any statements or omissions are made in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto in reliance upon and in conformity with written
information furnished to the Company by such Selling Securityholder specifically
for use therein, such Preliminary Prospectus did, and the Registration Statement
and the Prospectus and any amendments or supplements thereto, when they become
effective or are filed with the Commission, as the case may be, will conform in
all material respects to the requirements of the Act, the Exchange Act and the
respective rules and regulations of the Commission thereunder and will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they are made, not misleading.
Such Selling Securityholder has reviewed the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus) and the
Registration Statement, and the information regarding such Selling
Securityholder set forth therein under the caption "Principal and Selling
Securityholders" is complete and accurate.
(f) The sale by such Selling Securityholder of Securities pursuant hereto
is not prompted by any adverse information concerning the Company that is not
set forth in the Registration Statement or the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus).
(g) The sale of the Securities to the Underwriters by such Selling
Securityholder pursuant to this Agreement, the compliance by such Selling
Securityholder with the other provisions of this Agreement, the Custody
Agreement and the consummation of the other transactions herein contemplated do
not (i) require the consent, approval, authorization, registration or
qualification of or with any governmental authority, except such as have been
obtained, such as may be required under state securities or blue sky laws and,
if the registration statement filed with respect to the Securities (as amended)
is not effective under the Act as of the time of execution hereof, such as may
be required (and shall be obtained as provided in this Agreement) under the Act
and the Exchange Act, or (ii) conflict with or result in a breach or violation
of any of the terms and provisions of, or constitute a default under any
indenture, mortgage, deed of trust, lease or other agreement or instrument to
which such Selling Securityholder is a party or by which such Selling
Securityholder or any of such Selling Securityholder's properties are bound, or
any statute or any judgment, decree, order, rule or regulation of any court or
other governmental authority or any arbitrator applicable to such Selling
Securityholder.
(h) When any Preliminary Prospectus and any amendment or supplement
thereto was filed with the Commission, it (i) contained all statements
required to be stated therein in accordance with, and complied in all material
respects with the requirements of, the Act, the Exchange Act and the
respective rules and regulations of the Commission thereunder, and (ii) did
not include any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading. When the
Registration Statement or any amendment thereto was or is declared effective,
it (i) contained or will contain all statements required to be stated therein
in accordance with, and complied or will comply in all material respects with
the requirements of, the Act, the Exchange Act and the respective rules and
regulations of the Commission thereunder and (ii) did not or will not include
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading. When the Prospectus
or any Term Sheet that is a part thereof or any Integrated Prospectus or any
amendment or supplement to the Prospectus is filed with the Commission
pursuant to Rule 424(b) (or, if the Prospectus or part thereof or such
amendment or supplement is not required to be so filed, when the Registration
Statement or the amendment thereto containing such amendment or supplement to
the Prospectus was or is declared effective), on the date when the Prospectus
is otherwise amended or supplemented and on the Firm Closing Date and any
Option Closing Date (both as hereinafter defined), each of the Prospectus,
and, if required to be filed pursuant to Rules 434(c)(2) and 424(b) under the
Act, the Integrated Prospectus as amended or supplemented at any such time,
(i) contained or will contain all statements required to be stated therein in
accordance with, and complied or will comply in all material respects with the
requirements of, the Act, the Exchange Act and the respective rules and
regulations of the Commission thereunder and (ii) did not or will not include
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The foregoing
provisions of this paragraph (b) do not apply to statements or omissions made
in any Preliminary Prospectus or any amendment or supplement thereto, the
Registration Statement or any amendment thereto or the Prospectus or, if
required to be filed pursuant to Rules 434(c)(2) and 424(b) and the Act, the
Integrated Prospectus or any amendment or supplement thereto in reliance upon
and in conformity with written information furnished to the Company by any
Underwriter through the Representatives specifically for use therein.
4. Purchase, Sale and Delivery of the Securities. (a) On the basis of the
---------------------------------------------
representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, the Company agrees to
issue and sell to each of the Underwriters, and each of the Underwriters,
severally and not jointly, agrees to purchase from the Company, at a purchase
price of $_______ per share, the number of Firm Securities set forth opposite
the name of such Underwriter in Schedule I hereto. One or more certificates in
definitive form for the Firm Securities that the several Underwriters have
agreed to purchase hereunder, and in such denomination or denominations and
registered in such name or names as the Representatives
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request upon notice to the Company at least 48 hours prior to the Firm Closing
Date, shall be delivered by or on behalf of the Company to the Representatives
for the respective accounts of the Underwriters, against payment by or on behalf
of the Underwriters of the purchase price therefor by wire transfer in same-day
funds (the "Wired Funds") to the account of the Company. Such delivery of and
payment for the Firm Securities shall be made at the offices of ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ at 9:30 A.M., New York
time, on March ____, 2000, or at such other place, time or date as the
Representatives and the Company may agree upon or as the Representatives may
determine pursuant to Section 11 hereof, such time and date of delivery against
payment being herein referred to as the "Firm Closing Date". The Company will
make such certificate or certificates for the Firm Securities available for
checking and packaging by the Representatives at the offices in New York, New
York of the Company's transfer agent or registrar or of Prudential Securities
Incorporated at least 24 hours prior to the Firm Closing Date.
(b) For the purpose of covering any over-allotments in connection with the
distribution and sale of the Firm Securities as contemplated by the Prospectus,
the Company hereby grants to the several Underwriters an option to purchase,
severally and not jointly, 180,000 Option Securities and each Selling
Securityholder hereby grants to the several Underwriters an option to purchase,
severally and not jointly, the number of Option Securities set forth opposite
such Selling Securityholder's name on Schedule II hereto. The purchase price to
be paid for any Option Securities shall be the same price per share as the price
per share for the Firm Securities set forth above in paragraph (a) of this
Section 4. The option granted hereby may be exercised as to all or any part of
the Option Securities from time to time within thirty days after the date of the
Prospectus (or, if such 30th day shall be a Saturday or Sunday or a holiday, on
the next business day thereafter when the New York Stock Exchange is open for
trading). In the event that such option is exercised with respect to less than
330,000 Option Securities, (x) each Selling Securityholder will sell a number of
Option Securities equal to the total number of Option Securities to be purchased
multiplied by a fraction, the numerator of which is the maximum number of Option
Securities to be sold by such Selling Securityholder and the denominator of
which is 330,000, as adjusted by the Representatives in such manner as they deem
advisable to avoid fractional shares, and (y) the Company will sell the
remaining Option Securities to be sold. The Underwriters shall not be under any
obligation to purchase any of the Option Securities prior to the exercise of
such option. The Representatives may from time to time exercise the option
granted hereby by giving notice in writing or by telephone (confirmed in
writing) to the Company and the Selling Securityholders setting forth the
aggregate principal amount of Option Securities as to which the several
Underwriters are then exercising the option and the date and time for delivery
of and payment for such Option Securities. Any such date of delivery shall be
determined by the Representatives but shall not be earlier than two business
days or later than five business days after such exercise of the option and, in
any event, shall not be earlier than the Firm Closing Date. The time and date
set forth in such notice, or such other time on such other date as the
Representatives, the Selling Securityholders and the Company may agree upon or
as the Representatives may determine pursuant to Section 11 hereof, is herein
called the "Option Closing Date" with respect to such Option Securities. Upon
exercise of the option as provided herein, the Company and each Selling
Securityholder shall become obligated to sell to each of the several
Underwriters, and, subject to the terms and conditions herein set forth, each of
the Underwriters (severally and not jointly) shall become obligated to purchase
from the Company and each Selling Securityholder, the same percentage of the
total number of the Option Securities as to which the several Underwriters are
then exercising the option as such Underwriter is obligated to purchase of the
aggregate number of Firm Securities, as adjusted by the Representatives in such
manner as they deem advisable to avoid fractional shares. If the option
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is exercised as to all or any portion of the Option Securities, one or more
certificates in definitive form for such Option Securities, and payment
therefor, shall be delivered by the Company and the Selling Securityholders on
the related Option Closing Date in the manner, and upon the terms and
conditions, set forth in paragraph (a) of this Section 4, except that reference
therein to the Firm Securities and the Firm Closing Date shall be deemed, for
purposes of this paragraph (b), to refer to such Option Securities and Option
Closing Date, respectively.
(c) The Company and the Selling Securityholders hereby acknowledge that
the wire transfer by or on behalf of the Underwriters of the purchase price for
any Securities does not constitute closing of a purchase and sale of the
Securities. Only execution and delivery of a receipt for Securities by the
Underwriters indicates completion of the closing of a purchase of the Securities
from the Company or the Selling Securityholders. Furthermore, in the event that
the Underwriters wire funds to the Company or the Selling Securityholders prior
to the completion of the closing of a purchase of Securities, the Company and
the Selling Securityholders hereby acknowledge that until the Underwriters
execute and deliver a receipt for the Securities, by facsimile or otherwise, the
Company and the Selling Securityholders will not be entitled to the Wired Funds
and shall return the Wired Funds to the Underwriters as soon as practicable (by
wire transfer of same-day funds) upon demand. In the event that the closing of
a purchase of Securities is not completed and the Wired Funds are not returned
by the Company or the Selling Securityholders to the Underwriters on the same
day the Wired Funds were received by the Company or the Selling Securityholders,
the Company, or the Selling Securityholder who received such Wired Funds, as
applicable, agrees to pay to the Underwriters in respect of each day the Wired
Funds are not returned by it, in same-day funds, interest on the amount of such
Wired Funds in an amount representing the Underwriters' cost of financing as
reasonably determined by Prudential Securities Incorporated.
(d) It is understood that any of you, individually and not as one of the
Representatives, may (but shall not be obligated to) make payment on behalf of
any Underwriter or Underwriters for any of the Securities to be purchased by
such Underwriter or Underwriters. No such payment shall relieve such
Underwriter or Underwriters from any of its or their obligations hereunder.
5. Offering by the Underwriters. Upon your authorization of the release
----------------------------
of the Firm Securities, the several Underwriters propose to offer the Firm
Securities for sale to the public upon the terms set forth in the Prospectus.
6. Covenants of the Company. The Company covenants and agrees with each
------------------------
of the Underwriters that:
(a) The Company will use its best efforts to cause the Registration
Statement, if not effective at the time of execution of this Agreement, and any
amendments thereto to become effective as promptly as possible. If required,
the Company will file the Prospectus or any Term Sheet that constitutes a part
thereof and any amendment or supplement thereto with the Commission in the
manner and within the time period required by Rule 434 and 424(b) under the Act.
During any time when a prospectus relating to the Securities is required to be
delivered under the Act, the Company (i) will comply with all requirements
imposed upon it by the Act and the Exchange Act and the respective rules and
regulations of the Commission thereunder to the extent necessary to permit the
continuance of sales of or dealings in the Securities in accordance with the
provisions hereof and each of the Prospectus and any Integrated Prospectus, as
then amended or supplemented, and (ii) will not file with the Commission the
prospectus or the amendment referred to in the third sentence of Section 2(a)
hereof, any amendment or
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supplement to such prospectus or any amendment to the Registration Statement or
any Rule 462(b) Registration Statement of which the Representatives shall not
previously have been advised and furnished with a copy for a reasonable period
of time prior to the proposed filing and as to which filing the Representatives
shall not have given their consent. The Company will prepare and file with the
Commission, in accordance with the rules and regulations of the Commission,
promptly upon request by the Representatives or counsel for the Underwriters,
any amendments to the Registration Statement or amendments or supplements to the
Prospectus and any Integrated Prospectus that may be necessary or advisable in
connection with the distribution of the Securities by the several Underwriters,
and will use its best efforts to cause any such amendment to the Registration
Statement to be declared effective by the Commission as promptly as possible.
The Company will advise the Representatives, promptly after receiving notice
thereof, of the time when the Registration Statement or any amendment thereto
has been filed or declared effective or the Prospectus and any Integrated
Prospectus or any amendment or supplement thereto has been filed and will
provide evidence satisfactory to the Representatives of each such filing or
effectiveness.
(b) The Company will advise the Representatives, promptly after receiving
notice or obtaining knowledge thereof, of (i) the issuance by the Commission of
any stop order suspending the effectiveness of the Original Registration
Statement or any Rule 462(b) Registration Statement or any post-effective
amendment thereto or any order directed at any document incorporated by
reference in the Registration Statement or if the Prospectus and any required
Integrated Prospectus are or any amendment or supplement thereto or any order
preventing or suspending the use of any Preliminary Prospectus, the Prospectus
and any Integrated Prospectus or any amendment or supplement thereto, (ii) the
suspension of the qualification of the Securities for offering or sale in any
jurisdiction, (iii) the institution, threatening or contemplation of any
proceeding for any such purpose or (iv) any request made by the Commission for
amending the Original Registration Statement or any Rule 462(b) Registration
Statement, for amending or supplementing any Preliminary Prospectus, the
Prospectus and any Integrated Prospectus or for additional information. The
Company will use its best efforts to prevent the issuance of any such stop order
and, if any such stop order is issued, to obtain the withdrawal thereof as
promptly as possible.
(c) The Company will arrange for the qualification of the Securities for
offering and sale under the securities or blue sky laws of such jurisdictions as
the Representatives may designate and will continue such qualifications in
effect for as long as may be necessary to complete the distribution of the
Securities, provided, however, that in connection therewith the Company shall
-----------------
not be required to qualify as a foreign corporation or to execute a general
consent to service of process in any jurisdiction.
(d) If, at any time prior to the later of (i) the final date when a
prospectus relating to the Securities is required to be delivered under the Act
or (ii) the Option Closing Date, any event occurs as a result of which the
Prospectus, as then amended or supplemented, would 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, or if for any other reason it is necessary at any time to
amend or supplement the Prospectus to comply with the Act, the Exchange Act or
the respective rules or regulations of the Commission thereunder, the Company
will promptly notify the Representatives thereof and, subject to Section 6(a)
hereof, will prepare and file with the Commission, at the Company's expense, an
amendment to the Registration Statement, an amendment or supplement to the
Prospectus or any Integrated Prospectus that corrects such statement or omission
or effects such compliance.
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(e) The Company will, without charge, provide (i) to the Representatives
and to counsel for the Underwriters a signed copy of the registration statement
originally filed with respect to the Securities and each amendment thereto (in
each case including exhibits thereto) or any Rule 462(b) Registration Statement,
(ii) to each other Underwriter, a conformed copy of such registration statement
or any Rule 462(b) Registration Statement and each amendment thereto (in each
case without exhibits thereto) and (iii) so long as a prospectus relating to the
Securities is required to be delivered under the Act, as many copies of each
Preliminary Prospectus, the Prospectus or any Integrated Prospectus or any
amendment or supplement thereto as the Representatives may reasonably request;
without limiting the application of clause (iii) of this sentence, the Company,
not later than (A) 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 10:00
AM, New York City time on such date or (B) 2:00 PM, New York City time, on the
business day following the date of determination of the public offering price,
if such determination occurred after 10:00 AM, New York City time, on such date,
will deliver to the Underwriters, without charge, as many copies of the
Prospectus and any amendment or supplement thereto as the Representatives may
reasonably request for purposes of confirming orders that are expected to settle
on the Firm Closing Date.
(f) The Company, as soon as practicable, will make generally available to
its securityholders and to the Representatives a consolidated earnings statement
of the Company that satisfies the provisions of Section 11(a) of the Act and
Rule 158 thereunder.
(g) The Company will apply the net proceeds from the sale of the Securities
as set forth under "Use of Proceeds" in the Prospectus or any Integrated
Prospectus.
(h) The Company will not, directly or indirectly, without the prior written
consent of Prudential Securities Incorporated, on behalf of the Underwriters,
offer, sell, offer to sell, contract to sell, pledge, grant any option to
purchase or otherwise sell or dispose (or announce any offer, sale, offer of
sale, contract of sale, pledge, grant of any option to purchase or other sale or
disposition) of any shares of Common Stock or any securities convertible into,
or exchangeable or exercisable for, shares of Common Stock for a period of 90
days after the date hereof, except pursuant to this Agreement and except for
issuances pursuant to the exercise of employee stock options outstanding on the
date hereof or pursuant to the Company's employee stock purchase plan.
(i) The Company will not, directly or indirectly, (i) take any action
designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Securities or (ii) (A) sell, bid for, purchase, or pay anyone any compensation
for soliciting purchases of, the Securities or (B) pay or agree to pay to any
person any compensation for soliciting another to purchase any other securities
of the Company (except for the sale of Securities by the Selling Securityholders
under this Agreement).
(j) The Company will obtain the agreements described in Section 9(f) hereof
prior to the Firm Closing Date.
(k) If at any time during the 25-day period after the Registration
Statement becomes effective or the period prior to the Option Closing Date, any
rumor, publication or event relating to or affecting the Company shall occur as
a result of which in your opinion the market price of the
-14-
Common Stock has been or is likely to be materially affected (regardless of
whether such rumor, publication or event necessitates a supplement to or
amendment of the Prospectus and any Integrated Prospectus), the Company will,
after notice from you advising the Company to the effect set forth above,
forthwith prepare, consult with you concerning the substance of, and disseminate
a press release or other public statement, reasonably satisfactory to you,
responding to or commenting on such rumor, publication or event.
(l) If the Company elects to rely on Rule 462(b), the Company shall both
file a Rule 462(b) Registration Statement with the Commission in compliance with
Rule 462(b) and pay the applicable fees in accordance with Rule 111 promulgated
under the Act by the earlier of (i) 10:00 P.M. Eastern time on the date of this
Agreement and (ii) the time confirmations are sent or given, as specified by
Rule 462(b)(2).
(m) The Company will cause the Securities to be duly included for quotation
on The Nasdaq Stock Market's National Market (the "Nasdaq National Market")
prior to the Firm Closing Date. The Company will ensure that the Securities
remain included for quotation on the Nasdaq National Market following the Firm
Closing Date.
7. Covenants of the Selling Securityholders. Each Selling Securityholder
----------------------------------------
covenants and agrees with each of the Underwriters that:
(a) Each Selling Securityholder will not, directly or indirectly, without
the prior written consent of Prudential Securities Incorporated, offer, sell,
offer to sell, contract to sell, pledge, grant any option to purchase or
otherwise sell or dispose (or announce any offer, sale, offer of sale, contract
of sale, pledge, grant of any option to purchase or other sale or disposition)
of any Securities legally or beneficially owned by such Selling Securityholder
or any securities convertible into, or exchangeable or exercisable for,
Securities for a period of 90 days after the date hereof.
(b) Each Selling Securityholder will not, directly or indirectly, (i) take
any action designed to cause or result in, or that has constituted or which
might reasonably be expected to constitute, the stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale of the
Securities or (ii) (A) sell, bid for, purchase, or pay anyone any compensation
for soliciting purchases of, the Securities or (B) pay or agree to pay to any
person any compensation for soliciting another to purchase any other securities
of the Company (except for the sale of Securities by the Selling Securityholders
under this Agreement).
8. Expenses. The Company will pay all costs and expenses incident to the
--------
performance of its obligations under this Agreement, whether or not the
transactions contemplated herein are consummated or this Agreement is terminated
pursuant to Section 13 hereof, including all costs and expenses incident to (i)
the printing or other production of documents with respect to the transactions,
including any costs of printing the registration statement originally filed with
respect to the Securities and any amendment thereto, any Rule 462(b)
Registration Statement, any Preliminary Prospectus, the Prospectus and any
Integrated Prospectus and any amendment or supplement thereto, this Agreement
and any blue sky memoranda, (ii) all arrangements relating to the delivery to
the Underwriters of copies of the foregoing documents, (iii) the fees and
disbursements of the counsel, accountants and any other experts or advisors
retained by the Company, (iv) preparation, issuance and delivery to the
Underwriters of any certificates
-15-
evidencing the Securities, including transfer agent's and registrar's fees, (v)
the qualification of the Securities under state securities and blue sky laws,
including filing fees and fees and disbursements of counsel for the Underwriters
relating thereto, (vi) the filing fees of the Commission and the National
Association of Securities Dealers, Inc. relating to the Securities, (vii) the
quotation of the Securities on the Nasdaq National Market, (viii) the Company's
expenses with respect to meetings with prospective investors in the Securities
(other than shall have been specifically approved by the Representatives to be
paid for by the Underwriters) and (ix) advertising relating to the offering of
the Securities (other than the cost of advertising in the Wall Street Journal
National Edition to be paid for by the Underwriters). 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 9 hereof is not satisfied,
because this Agreement is terminated pursuant to Sections 13(a) or 13(b)(i) or
(ii) hereof or because of any failure, refusal or inability on the part of the
Company or the Selling Securityholders to perform all obligations and satisfy
all conditions on its or their part to be performed or satisfied hereunder other
than by reason of a default by any of the Underwriters, the Company will
reimburse the Underwriters severally upon demand for all out-of-pocket expenses
(including fees and disbursements of counsel) that shall have been incurred by
them in connection with the proposed purchase and sale of the Securities. The
Company shall not in any event be liable to any of the Underwriters for the loss
of anticipated profits from the transactions covered by this Agreement.
The Selling Securityholders will pay (directly or by reimbursement) all
fees and expenses incident to the performance of their obligation under this
Agreement which are not otherwise specifically provided for herein, including
but not limited to (i) any fees and expenses of counsel to such Selling
Securityholders; (ii) any fees and expenses of the Custodian; and (iii) all
expenses and taxes incident to the sale and delivery of the Option Securities to
be sold by such Selling Securityholders to the Underwriters hereunder.
9. Conditions of the Underwriters' Obligations. The obligations of the
-------------------------------------------
several Underwriters to purchase and pay for the Firm Securities shall be
subject, in the Representatives' sole discretion, to the accuracy of the
representations and warranties of the Company and the Selling Securityholders
contained herein as of the date hereof and as of the Firm Closing Date, as if
made on and as of the Firm Closing Date, to the accuracy of the statements of
the Company's officers made pursuant to the provisions hereof, to the
performance by the Company and the Selling Securityholders of their respective
covenants and agreements hereunder and to the following additional conditions:
(a) If the Original Registration Statement or any amendment thereto filed
prior to the Firm Closing Date has not been declared effective as of the time of
execution hereof, such Original Registration Statement or such amendment and, if
the Company has elected to rely upon Rule 462(b), the Rule 462(b) Registration
Statement, shall have been declared effective not later than the earlier of (i)
11:00 A.M., New York time, on the date on which the amendment to the
registration statement originally filed with respect to the Securities or to the
Registration Statement, as the case may be, containing information regarding the
initial public offering price of the Securities has been filed with the
Commission and (ii) the time confirmations are sent or given as specified by
Rule 462(b)(2), or with respect to the Original Registration Statement, or such
later time and date as shall have been consented to by the Representatives; if
required, the Prospectus or any Term Sheet that constitutes a part thereof and
any Integrated Prospectus and any amendment or supplement thereto shall have
been filed with the Commission in the manner and within the time period required
by Rule 434 and 424(b) under the Act; no stop order suspending the effectiveness
of the Registration Statement or any post-effective amendment thereto and no
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order directed at any document incorporated by reference in the Registration
Statement, the Prospectus or any Integrated Prospectus or any amendment or
supplement thereto shall have been issued and no proceedings for that purpose
shall have been instituted or threatened or, to the knowledge of the Company or
the Representatives, shall be contemplated by the Commission; and the Company
shall have complied with any request of the Commission for additional
information (to be included in the Registration Statement, the Prospectus or any
Integrated Prospectus or otherwise).
(b) The Representatives shall have received an opinion, dated the Firm
Closing Date, of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel for the Company and the
Selling Securityholders, to the effect that:
(i) the Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of its jurisdiction of
incorporation and is duly qualified to transact business as a foreign
corporation and is in good standing under the laws of all other
jurisdictions where the ownership or leasing of its properties or the
conduct of its business requires such qualification, except where the
failure to be so qualified would not have a material adverse effect on the
condition (financial or otherwise), management, business, prospects, net
worth or results of operations of the Company;
(ii) the Company has corporate power to own or lease its properties
and conduct its business as described in the Registration Statement and the
Prospectus or any Integrated Prospectus, and the Company has corporate power
to enter into this Agreement and to carry out all the terms and provisions
hereof and thereof to be carried out by it;
(iii) the Company has an authorized, issued and outstanding
capitalization as set forth in each of the Prospectus or any Integrated
Prospectus; all of the issued shares of capital stock of the Company have
been duly authorized and validly issued and are fully paid and
nonassessable, have been issued in compliance with all applicable federal
and state securities laws and were not issued in violation of or subject to
any preemptive rights or other rights to subscribe for or purchase
securities; the Firm Securities have been duly authorized by all necessary
corporate action of the Company and, when issued and delivered to and paid
for by the Underwriters pursuant to this Agreement, will be validly issued,
fully paid and nonassessable; the Securities have been duly included for
trading on the Nasdaq National Market; no holders of outstanding shares of
capital stock of the Company are entitled as such to any preemptive or other
rights to subscribe for any of the Securities; and no holders of securities
of the Company are entitled to have such securities registered under the
Registration Statement, except for those who have waived such registration
rights;
(iv) the execution and delivery of this Agreement have been duly
authorized by all necessary corporate action of the Company and this
Agreement has been duly executed and delivered by the Company;
(v) to the best knowledge of such counsel, no legal or governmental
proceedings are pending to which the Company is a party or to which the
property of the Company is subject that are required to be described in the
Registration Statement, the Prospectus or any Integrated Prospectus and are
not described
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therein, and, to the best knowledge of such counsel, no such proceedings
have been threatened against the Company or with respect to any of its
properties; and to the best knowledge of such counsel, no contract or other
document is required to be described in the Registration Statement, the
Prospectus or any Integrated Prospectus or to be filed as an exhibit to the
Registration Statement that is not described therein or filed as required;
(vi) the issuance, offering and sale of the Securities to the
Underwriters by the Company pursuant to this Agreement, the compliance by
the Company with the other provisions of this Agreement and the consummation
of the other transactions herein contemplated do not (A) require the
consent, approval, authorization, registration or qualification of or with
any governmental authority, except such as have been obtained and such as
may be required under state securities or blue sky laws, or (B) conflict
with or result in a breach or violation of any of the terms and provisions
of, or constitute a default under, any indenture, mortgage, deed of trust,
lease or other agreement or instrument, known to such counsel, to which the
Company is a party or by which the Company or any of its properties are
bound, or the charter documents or by-laws of the Company, or any statute or
any judgment, decree, order, rule or regulation of any court or other
governmental authority or any arbitrator known to such counsel and
applicable to the Company;
(vii) the Registration Statement is effective under the Act; any
required filing of the Prospectus, or any Term Sheet that constitutes a part
thereof, and any Integrated Prospectus pursuant to Rules 434 and 424(b) has
been made in the manner and within the time period required by Rules 434 and
424(b); and no stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereto and no order directed at
any document incorporated by reference in the Registration Statement, the
Prospectus and any Integrated Prospectus or any amendment or supplement
thereto has been issued, and, to the best knowledge of such counsel, no
proceedings for that purpose have been instituted or threatened or, to the
best knowledge of such counsel, are contemplated by the Commission; and
(viii) the Registration Statement originally filed with respect to the
Securities and each amendment thereto and any Rule 462(b) Registration
Statement, the Prospectus and any Integrated Prospectus (in each case,
including the documents incorporated by reference therein but not including
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 requirements of the Act, the Exchange
Act and the respective rules and regulations of the Commission thereunder.
(ix) If the Company elects to rely on Rule 434, the Prospectus is
not "materially different", as such term is used in Rule 434, from the
prospectus included in the Registration Statement at the time of its
effectiveness or any effective post-effective amendment thereto (including
such information that is permitted to be omitted pursuant to Rule 430A).
(x) this Agreement, the Custody Agreement and the Power of Attorney
have been duly executed and delivered by each Selling Securityholder;
assuming due authorization, execution and delivery by the Custodian, the
Custody Agreement and
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the Power of Attorney are the legal, valid, binding and enforceable
instruments of such Selling Securityholder, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors' rights
generally and subject, as to enforceability, to general principles of
equity (regardless of whether enforcement is sought in a proceeding in
equity or at law);
(xi) the delivery by each Selling Securityholder to the several
Underwriters of certificates for the Securities being sold hereunder by
such Selling Securityholder against payment therefor as provided herein,
will convey good and marketable title to such Securities to the several
Underwriters, free and clear of all security interests, liens,
encumbrances, equities, claims or other defects;
(xii) the sale of the Securities to the Underwriters by such Selling
Securityholder pursuant to this Agreement, the compliance by such Selling
Securityholder with the other provisions of this Agreement, the Custody
Agreement and the consummation of the other transactions herein
contemplated do not (i) require the consent, approval, authorization,
registration or qualification of or with any governmental authority, except
such as have been obtained and such as may be required under state
securities or blue sky laws, or (ii) to the best knowledge of such counsel,
conflict with or result in a breach or violation of any of the terms and
provisions of, or constitute a default under any indenture, mortgage, deed
of trust, lease or other agreement or instrument to which such Selling
Securityholder is a party or by which such Selling Securityholder or any of
such Selling Securityholder's properties are bound, or any statute or any
judgment, decree, order, rule or regulation of any court or other
governmental authority or any arbitrator applicable to such Selling
Securityholder.
Such counsel shall also state that nothing has come to their attention that
leads them to believe that the Registration Statement, as of its effective date,
contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus and any Integrated Prospectus, as
of its date or the date of such opinion, included or includes any untrue
statement of a material fact or omitted or omits 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.
In rendering any such opinion, such counsel may rely, as to matters of fact,
to the extent such counsel deems proper, on certificates of responsible officers
of the Company and public officials.
References to the Registration Statement and the Prospectus and any
Integrated Prospectus in this paragraph (b) shall include any amendment or
supplement thereto at the date of such opinion.
(c) The Representatives shall have received an opinion, dated the Firm
Closing Date, of Pillsbury Madison & Sutro LLP, counsel for the Underwriters,
with respect to the issuance and sale of the Firm Securities, the Registration
Statement, the Prospectus or any Integrated Prospectus, and such other related
matters as the Representatives may reasonably require, and the Company shall
have furnished to such counsel such documents as they may reasonably request for
the purpose of enabling them to pass upon such matters.
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(d) The Representatives shall have received from Deloitte & Touche LLP a
letter or letters dated, respectively, the date hereof and the Firm Closing
Date, in form and substance satisfactory to the Representatives, to the effect
that:
(i) they are independent accountants with respect to the Company
within the meaning of the Act, the Exchange Act and the applicable rules and
regulations thereunder;
(ii) in their opinion, the audited financial statements and
schedules examined by them and included in the Registration Statement, the
Prospectus and any Integrated Prospectus comply in form in all material
respects with the applicable accounting requirements of the Act, the
Exchange Act and the related published rules and regulations thereunder;
(iii) on the basis of a reading of the latest available interim
unaudited condensed financial statements of the Company, carrying out
certain specified procedures (which do not constitute an examination made in
accordance with generally accepted auditing standards) that would not
necessarily reveal matters of significance with respect to the comments set
forth in this paragraph (iii), a reading of the minute books of the
shareholders, the board of directors and any committees thereof of the
Company, and inquiries of certain officials of the Company who have
responsibility for financial and accounting matters, nothing came to their
attention that caused them to believe that:
(A) the unaudited condensed financial statements of the Company
included in the Registration Statement, the Prospectus and any
Integrated Prospectus do not comply in form in all material respects
with the applicable accounting requirements of the Act, the Exchange
Act and the related published rules and regulations thereunder, or are
not in conformity with generally accepted accounting principles
applied on a basis substantially consistent with that of the audited
financial statements included in the Registration Statement, the
Prospectus and any Integrated Prospectus;
(B) at March __, 2000, there were any changes in the capital
stock or long-term debt of the Company or any decreases in net current
assets or stockholders' equity of the Company, in each case compared
with amounts shown on the December 31, 1999 unaudited balance sheet
included in the Registration Statement, the Prospectus and any
Integrated Prospectus, or for the period from January 1, 2000 to such
specified date there were any decreases, as compared with amounts
shown on the December 31, 1999 unaudited statement of income included
in the Registration Statement, in sales, net revenues, net income
before income taxes or total or per share amounts of net income of the
Company, except in all instances for changes, decreases or increases
set forth in such letter;
(iv) they have carried out certain specified procedures, not
constituting an audit, with respect to certain amounts, percentages and
financial information that are derived from the general accounting records
of the Company and are included in the Registration Statement, the
Prospectus and any Integrated Prospectus or under any Exchange Act reports
incorporated by reference in the Registration Statement, the
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Prospectus and any Integrated Prospectus, and have compared such amounts,
percentages and financial information with such records of the Company and
with information derived from such records and have found them to be in
agreement, excluding any questions of legal interpretation.
In the event that the letters referred to above set forth any such changes,
decreases or increases, it shall be a further condition to the obligations of
the Underwriters that (A) such letters shall be accompanied by a written
explanation of the Company as to the significance thereof, unless the
Representatives deem such explanation unnecessary, and (B) such changes,
decreases or increases do not, in the sole judgment of the Representatives, make
it impractical or inadvisable to proceed with the purchase and delivery of the
Securities as contemplated by the Registration Statement, as amended as of the
date hereof.
References to the Registration Statement, the Prospectus and any Integrated
Prospectus in this paragraph (d) with respect to either letter referred to above
shall include any amendment or supplement thereto at the date of such letter.
(e) The Representatives shall have received a certificate, dated the Firm
Closing Date, of the principal executive officer and the principal financial or
accounting officer of the Company to the effect that:
(i) the representations and warranties of the Company in this
Agreement are true and correct as if made on and as of the Firm Closing
Date; the Registration Statement, as amended as of the Firm Closing Date,
does not include any untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein not misleading;
the Prospectus and any Integrated Prospectus, as amended or supplemented as
of the Firm Closing Date, does not include any untrue statement of a
material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading; and the Company has performed all covenants and
agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to the Firm Closing Date;
(ii) no stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereto and no order directed at
any document incorporated by reference in the Registration Statement or the
Prospectus or any amendment or supplement thereto has been issued, and no
proceedings for that purpose have been instituted or threatened or, to the
best of the Company's knowledge, are contemplated by the Commission; and
(iii) subsequent to the respective dates as of which information is
given in the Registration Statement, the Prospectus and any Integrated
Prospectus, the Company has not sustained any material loss or interference
with its business or properties from fire, flood, hurricane, accident or
other calamity, whether or not covered by insurance, or from any labor
dispute or any legal or governmental proceeding, and there has not been any
material adverse change, or any development involving a prospective material
adverse change, in the condition (financial or otherwise), management,
business, prospects, net worth or results of operations of the Company,
except in each case as described in or contemplated by the Prospectus and
any Integrated Prospectus.
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(f) The Representatives shall have received from each person who is a
director or executive officer of the Company an agreement to the effect that
such person will not, directly or indirectly, without the prior written consent
of Prudential Securities Incorporated, on behalf of the Underwriters, offer,
sell, offer to sell, contract to sell, pledge, grant any option to purchase or
otherwise sell or dispose (or announce any offer, sale, offer of sale, contract
of sale, pledge, grant of an option to purchase or other sale or disposition) of
any shares of Common Stock or any securities convertible into, or exchangeable
or exercisable for, shares of Common Stock for a period of 90 days after the
date of this Agreement.
(g) The Representatives shall have received a certificate from each
Selling Securityholder, signed by such Selling Securityholder, dated the Closing
Date, to the effect that:
(i) the representations and warranties of such Selling Securityholder
in this Agreement are true and correct as if made on and as of the Closing
Date; and
(ii) such Selling Securityholder has performed all covenants and
agreements on its part to be performed or satisfied at or prior to the
Closing Date.
(h) On or before the Firm Closing Date, the Representatives and counsel
for the Underwriters shall have received such further certificates, documents or
other information as they may have reasonably requested from the Company.
(i) Prior to the commencement of the offering of the Securities, the
Securities shall have been included for trading on the Nasdaq National Market.
All opinions, certificates, letters and documents delivered pursuant to
this Agreement will comply with the provisions hereof only if they are
reasonably satisfactory in all material respects to the Representatives and
counsel for the Underwriters. The Company shall furnish to the Representatives
such conformed copies of such opinions, certificates, letters and documents in
such quantities as the Representatives and counsel for the Underwriters shall
reasonably request.
The respective obligations of the several Underwriters to purchase and pay
for any Option Securities shall be subject, in their discretion, to each of the
foregoing conditions to purchase the Firm Securities, except that all references
to the Firm Securities and the Firm Closing Date shall be deemed to refer to
such Option Securities and the related Option Closing Date, respectively.
10. Indemnification and Contribution.
---------------------------------
(a) The Company agrees to indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter within the meaning of Section
15 of the Act or Section 20 of the Exchange Act against any losses, claims,
damages or liabilities, joint or several, to which such Underwriter or such
controlling person may become subject under the Act, the Exchange Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement made in Section
2 of this Agreement,
-22-
(ii) any untrue statement or alleged untrue statement of any material
fact contained in (A) the Registration Statement or any amendment thereto,
any Preliminary Prospectus, the Prospectus and any Integrated Prospectus or
any amendment or supplement thereto or (B) any application or other
document, or any amendment or supplement thereto, executed by the Company or
such Selling Securityholder or based upon written information furnished by
or on behalf of the Company or such Selling Securityholder filed in any
jurisdiction in order to qualify the Securities under the securities or blue
sky laws thereof or filed with the Commission or any securities association
or securities exchange (each an "Application"),
(iii) the omission or alleged omission to state in the Registration
Statement or any amendment thereto, any Preliminary Prospectus, the
Prospectus and any Integrated Prospectus or any amendment or supplement
thereto, or any Application, a material fact required to be stated therein
or necessary to make the statements therein not misleading, or
(iv) any untrue statement or alleged untrue statement of any material
fact contained in any audio or visual materials provided by the Company or
based upon written information furnished by or on behalf of the Company,
including, without limitation, slides, videos, films and tape recordings,
used in connection with the marketing of the Securities, including, without
limitation, statements communicated to securities analysts employed by the
Underwriters;
and will reimburse, as incurred, each Underwriter and each such controlling
person for any legal or other expenses reasonably incurred by such
Underwriter or such controlling person in connection with investigating,
defending against or appearing as a third-party witness in connection with
any such loss, claim, damage, liability or action; provided, however, that
-------- -------
the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission made
in such registration statement or any amendment thereto, any Preliminary
Prospectus, the Prospectus and any Integrated Prospectus or any amendment or
supplement thereto, or any Application in reliance upon and in conformity
with written information furnished to the Company by such Underwriter
through the Representatives specifically for use therein; and provided,
--------
further, that the Company will not be liable to any Underwriter or any
-------
person controlling such Underwriter with respect to any such untrue
statement or omission made in any Preliminary Prospectus that is corrected
in the Prospectus (or any amendment or supplement thereto) if the person
asserting any such loss, claim, damage or liability purchased Securities
from such Underwriter but was not sent or given a copy of the Prospectus (as
amended or supplemented), other than the documents incorporated by reference
therein, at or prior to the written confirmation of the sale of such
Securities to such person in any case where such delivery of the Prospectus
(as amended or supplemented) is required by the Act, unless such failure to
deliver the Prospectus (as amended or supplemented) was a result of
noncompliance by the Company with Section 6(d) and (a) of this Agreement.
This indemnity agreement will be in addition to any liability which the
Company may otherwise have. The Company will not, without the prior written
consent of the Underwriter or Underwriters purchasing, in the aggregate,
more than fifty percent (50%) of the Securities, settle or compromise or
consent to the entry of any judgment in any pending or threatened claim,
action, suit or proceeding in respect of which indemnification may be sought
hereunder (whether or not any such Underwriter or any person who controls
any such Underwriter within the meaning of Section 15 of the Act
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or Section 20 of the Exchange Act is a party to such claim, action, suit or
proceeding), unless such settlement, compromise or consent includes an
unconditional release of all of the Underwriters and such controlling
persons from all liability arising out of such claim, action, suit or
proceeding.
(b) Each Selling Securityholder jointly and severally agrees to indemnify
and hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter or such controlling person may become subject
under the Act, the Exchange Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon:
(i) any untrue statement or alleged untrue statement made in
Section 3 of this Agreement,
(ii) any untrue statement or alleged untrue statement of any material
fact contained in (A) the Registration Statement or any amendment thereto,
any Preliminary Prospectus, the Prospectus and any Integrated Prospectus or
any amendment or supplement thereto or (B) any application or other
document, or any amendment or supplement thereto, executed by the Company or
such Selling Securityholder or based upon written information furnished by
or on behalf of the Company or such Selling Securityholder filed in any
jurisdiction in order to qualify the Securities under the securities or blue
sky laws thereof or filed with the Commission or any securities association
or securities exchange (each an "Application"), or
(iii) the omission or alleged omission to state in the Registration
Statement or any amendment thereto, any Preliminary Prospectus, the
Prospectus and any Integrated Prospectus or any amendment or supplement
thereto, or any Application, a material fact required to be stated therein
or necessary to make the statements therein not misleading,
and will reimburse, as incurred, each Underwriter and each such controlling
person for any legal or other expenses reasonably incurred by such
Underwriter or such controlling person in connection with investigating,
defending against or appearing as a third-party witness in connection with
any such loss, claim, damage, liability or action; provided, however, that
-------- -------
each Selling Securityholder will be liable in the case of (b)(ii) and (iii)
above only to the extent that any such loss, claim, damage or liability
arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in such registration
statement or any amendment thereto, any Preliminary Prospectus, the
Prospectus and any Integrated Prospectus or any amendment or supplement
thereto, or any Application in reliance upon and in conformity with written
information furnished to the Company by such Selling Securityholder
specifically for use therein; and provided, further, that the Selling
-------- -------
Securityholders will not be liable to any Underwriter or any person
controlling such Underwriter with respect to any such untrue statement or
omission made in any Preliminary Prospectus that is corrected in the
Prospectus (or any amendment or supplement thereto) if the person asserting
any such loss, claim, damage or liability purchased Securities from such
Underwriter but was not sent or given a copy of the Prospectus (as amended
or supplemented), other than the documents incorporated by reference
therein, at or prior to the written confirmation of the sale of such
Securities to such person in any case where such delivery of the Prospectus
(as amended or supplemented) is
-24-
required by the Act, unless such failure to deliver the Prospectus (as
amended or supplemented) was a result of noncompliance by the Company with
Section 6(d) and (a) of this Agreement. This indemnity agreement will be in
addition to any liability which the Selling Securityholders may otherwise
have. The Company and the Selling Securityholders may agree, as among
themselves and without limiting the rights of the Underwriters under this
Agreement, as to their respective amounts of such liability for which they
each shall be responsible. The Selling Securityholders will not, without the
prior written consent of the Underwriter or Underwriters purchasing, in the
aggregate, more than fifty percent (50%) of the Securities, settle or
compromise or consent to the entry of any judgment in any pending or
threatened claim, action, suit or proceeding in respect of which
indemnification may be sought hereunder (whether or not any such Underwriter
or any person who controls any such Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act is a party to such
claim, action, suit or proceeding), unless such settlement, compromise or
consent includes an unconditional release of all of the Underwriters and
such controlling persons from all liability arising out of such claim,
action, suit or proceeding.
(c) Each Underwriter, severally and not jointly, will indemnify and hold
harmless the Company, each of its directors, each of its officers who signed the
Registration Statement, each Selling Securityholder, and each person, if any,
who controls the Company or such Selling Securityholder within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act against any losses,
claims, damages or liabilities to which the Company, any director or officer of
the Company, such Selling Securityholder or any such controlling person of the
Company or such Selling Securityholder may become subject under the Act, the
Exchange Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (i)
any untrue statement or alleged untrue statement of any material fact contained
in the Registration Statement or any amendment thereto, any Preliminary
Prospectus, the Prospectus or any Integrated Prospectus or any amendment or
supplement thereto, or any Application or (ii) the omission or the alleged
omission to state therein a material fact required to be stated in the
Registration Statement or any amendment thereto, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto, or any Application or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such Underwriter
through the Representatives specifically for use therein; and, subject to the
limitation set forth immediately preceding this clause, will reimburse, as
incurred, any legal or other expenses reasonably incurred by the Company or any
such director, officer or controlling person or such Selling Securityholder in
connection with investigating or defending any such loss, claim, damage,
liability or any action in respect thereof. This indemnity agreement will be in
addition to any liability which such Underwriter may otherwise have.
(d) Promptly after receipt by an indemnified party under this Section 10 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 10, notify the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party otherwise than under this
Section 10. In case any such action is brought against any indemnified party,
and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent
that it may wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel reasonably satisfactory to such
indemnified party; provided, however, that if the defendants in any such action
-------- -------
include both the indemnified party
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and the indemnifying party and the indemnified party shall have reasonably
concluded that there may be one or more legal defenses available to it and/or
other indemnified parties which are different from or additional to those
available to the indemnifying party, the indemnifying party shall not have the
right to direct the defense of such action on behalf of such indemnified party
or parties and such indemnified party or parties shall have the right to select
separate counsel to defend such action on behalf of such indemnified party or
parties. After notice from the indemnifying party to such indemnified party of
its election so to assume the defense thereof and approval by such indemnified
party of counsel appointed to defend such action, the indemnifying party will
not be liable to such indemnified party under this Section 10 for any legal or
other expenses, other than reasonable costs of investigation, subsequently
incurred by such indemnified party in connection with the defense thereof,
unless (i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the next preceding sentence (it being understood,
however, that in connection with such action the indemnifying party shall not be
liable for the expenses of more than one separate counsel (in addition to local
counsel) in any one action or separate but substantially similar actions in the
same jurisdiction arising out of the same general allegations or circumstances,
designated by the Representatives in the case of paragraph (a) of this Section
10, representing the indemnified parties under such paragraph (a) who are
parties to such action or actions) or (ii) the indemnifying party does not
promptly retain counsel reasonably satisfactory to the indemnified party or
(iii) the indemnifying party has authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party. After such notice
from the indemnifying party to such indemnified party, the indemnifying party
will not be liable for the costs and expenses of any settlement of such action
effected by such indemnified party without the consent of the indemnifying
party.
(e) In circumstances in which the indemnity agreement provided for in the
preceding paragraphs of this Section 10 is unavailable or insufficient, for any
reason, to hold harmless an indemnified party in respect of any losses, claims,
damages or liabilities (or actions in respect thereof), each indemnifying party,
in order to provide for just and equitable contribution, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect (i) the relative benefits received by
the indemnifying party or parties on the one hand and the indemnified party on
the other from the offering of the Securities or (ii) if the allocation provided
by the foregoing clause (i) is not permitted by applicable law, not only such
relative benefits but also the relative fault of the indemnifying party or
parties on the one hand and the indemnified party on the other in connection
with the statements or omissions or alleged statements or omissions that
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Selling Securityholders on the one hand
and the Underwriters on the other shall be deemed to be in the same proportion
as the total proceeds from the offering (before deducting expenses) received by
the Company and the Selling Securityholders bear to the total underwriting
discounts and commissions received by the Underwriters. The relative fault of
the parties shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company, the Selling Securityholders or the Underwriters, the parties' relative
intents, knowledge, access to information and opportunity to correct or prevent
such statement or omission, and any other equitable considerations appropriate
in the circumstances. The Company and the Underwriters agree that it would not
be equitable if the amount of such contribution were determined by pro rata or
per capita allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation that does not take into
account the equitable considerations referred to above in this paragraph (d).
Notwithstanding any other provision of this paragraph
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(d), no Underwriter shall be obligated to make contributions hereunder that in
the aggregate exceed the total public offering price of the Securities purchased
by such Underwriter under this Agreement, less the aggregate amount of any
damages that such Underwriter has otherwise been required to pay in respect of
the same or any substantially similar claim, and no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute hereunder are
several in proportion to their respective underwriting obligations and not
joint, and contributions among Underwriters shall be governed by the provisions
of the Prudential Securities Incorporated Master Agreement Among Underwriters.
For purposes of this paragraph (d), each person, if any, who controls an
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement and each person, if any, who controls the Company or any
Selling Securityholders within the meaning of Section 15 of the Act or Section
20 of the Exchange Act, shall have the same rights to contribution as the
Company or such Selling Securityholder, as the case may be.
(f) The liability of each Selling Securityholder under this Section 10
shall not exceed an amount equal to the purchase price per share set forth in
Section 4 hereof multiplied by the number of Option Securities sold by such
Selling Securityholder. Notwithstanding anything to the contrary in this
Agreement, the Underwriters and their control persons shall not seek
indemnification pursuant to this Section 10 from any Selling Securityholder
unless they have first reasonably determined that the Company is unable, not
required, or has otherwise failed for a period of sixty (60) days to satisfy
fully the indemnification obligations of such Selling Securityholder pursuant to
this Section 10.
11. Default of Underwriters. If one or more Underwriters default in their
-----------------------
obligations to purchase Firm Securities or Option Securities hereunder and the
aggregate number of such Securities that such defaulting Underwriter or
Underwriters agreed but failed to purchase is ten percent or less of the
aggregate number of Firm Securities or Option Securities to be purchased by all
of the Underwriters at such time hereunder, the other Underwriters may make
arrangements satisfactory to the Representatives for the purchase of such
Securities by other persons (who may include one or more of the non-defaulting
Underwriters, including the Representatives), but if no such arrangements are
made by the Firm Closing Date or the related Option Closing Date, as the case
may be, the other Underwriters shall be obligated severally in proportion to
their respective commitments hereunder to purchase the Firm Securities or Option
Securities that such defaulting Underwriter or Underwriters agreed but failed to
purchase. If one or more Underwriters so default with respect to an aggregate
number of Securities that is more than ten percent of the aggregate number of
Firm Securities or Option Securities, as the case may be, to be purchased by all
of the Underwriters at such time hereunder, and if arrangements satisfactory to
the Representatives are not made within 36 hours after such default for the
purchase by other persons (who may include one or more of the non-defaulting
Underwriters, including the Representatives) of the Securities with respect to
which such default occurs, this Agreement will terminate without liability on
the part of any non-defaulting Underwriter, the Company or any Selling
Securityholder other than as provided in Section 12 hereof. In the event of any
default by one or more Underwriters as described in this Section 11, the
Representatives shall have the right to postpone the Firm Closing Date or the
Option Closing Date, as the case may be, established as provided in Section 4
hereof for not more than seven business days in order that any necessary changes
may be made in the arrangements or documents for the purchase and delivery of
the Firm Securities or Option Securities, as the case may be. As used in this
Agreement, the term "Underwriter" includes any
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person substituted for an Underwriter under this Section 11. Nothing herein
shall relieve any defaulting Underwriter from liability for its default.
12. Survival. The respective representations, warranties, agreements,
--------
covenants, indemnities and other statements of the Company, its officers, each
Selling Securityholder and the several Underwriters set forth in this Agreement
or made by or on behalf of them, respectively, pursuant to this Agreement shall
remain in full force and effect, regardless of (i) any investigation made by or
on behalf of the Company, any of its officers or directors, any Selling
Securityholder, any Underwriter or any controlling person referred to in Section
10 hereof and (ii) delivery of and payment for the Securities. The respective
agreements, covenants, indemnities and other statements set forth in Sections 8
and 10 hereof shall remain in full force and effect, regardless of any
termination or cancellation of this Agreement.
13. Termination. This Agreement may be terminated with respect to the Firm
-----------
Securities or any Option Securities in the sole discretion of the
Representatives by notice to the Company and the Selling Securityholders given
prior to the Firm Closing Date or the related Option Closing Date, respectively,
in the event that:
(a) the Company or any Selling Securityholder shall have failed, refused or
been unable to perform all obligations and satisfy all conditions on its
part to be performed or satisfied hereunder at or prior thereto or, if at or
prior to the Firm Closing Date or such Option Closing Date, respectively,
(b) (i) the Company shall have, in the sole judgment of the
Representatives, sustained any material loss or interference with its
business or properties from fire, flood, hurricane, accident or other
calamity, whether or not covered by insurance, or from any labor dispute or
any legal or governmental proceeding or there shall have been any material
adverse change, or any development involving a prospective material adverse
change (including without limitation a change in management or control of
the Company), in the condition (financial or otherwise), business,
prospects, net worth or results of operations of the Company, except in each
case as described in or contemplated by the Prospectus (exclusive of any
amendment or supplement thereto);
(ii) trading in the Common Stock shall have been suspended by the
Commission or the Nasdaq National Market;
(iii) trading in securities generally on the New York Stock Exchange
or the Nasdaq National Market shall have been suspended or minimum or
maximum prices shall have been established on such exchange.
(iv) a banking moratorium shall have been declared by New York or
United States authorities; or
(v) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, (B) an outbreak
or escalation of any other insurrection or armed conflict involving the
United States or (C) any other calamity or crisis or material adverse change
in general economic, political or financial conditions having an effect on
the U. S. financial markets that, in the sole judgment of the
Representatives, makes it impractical or inadvisable to proceed with the
public
-28-
offering or the delivery of the Securities as contemplated by the
Registration Statement, as amended as of the date hereof.
(c) Termination of this Agreement pursuant to this Section 13 shall be
without liability of any party to any other party except as provided in Section
12 hereof.
14. Information Supplied by Underwriters. The statements set forth in the
------------------------------------
last paragraph on the front cover page and under the heading "Underwriting" in
any Preliminary Prospectus, the Prospectus or any Integrated Prospectus (to the
extent such statements relate to the Underwriters) constitute the only
information furnished by any Underwriter through the Representatives to the
Company for the purposes of Sections 2(b) and 10 hereof. The Underwriters
confirm that such statements (to such extent) are correct.
15. Notices. All communications hereunder shall be in writing and, if sent
-------
to any of the Underwriters, shall be delivered or sent by mail, telex or
facsimile transmission and confirmed in writing to Prudential Securities
Incorporated, ▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Equity
Transactions Group; if sent to the Company, shall be delivered or sent by mail,
telex or facsimile transmission and confirmed in writing to the Company at
Pericom Semiconductor Corporation, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇; and if sent to the Selling Securityholders, shall be delivered or sent by
mail, telex or facsimile transmission and confirmed in writing to the Selling
Securityholder at the foregoing address for the Company.
16. Successors. This Agreement shall inure to the benefit of and shall be
----------
binding upon the several Underwriters, the Company, the Selling Securityholders
and their respective successors and legal representatives, and nothing expressed
or mentioned in this Agreement is intended or shall be construed to give any
other person any legal or equitable right, remedy or claim under or in respect
of this Agreement, or any provisions herein contained, this Agreement and all
conditions and provisions hereof being intended to be and being for the sole and
exclusive benefit of such persons and for the benefit of no other person except
that (i) the indemnities of the Company and the Selling Securityholders
contained in Section 10 of this Agreement shall also be for the benefit of any
person or persons who control any Underwriter within the meaning of Section 15
of the Act or Section 20 of the Exchange Act and (ii) the indemnities of the
Underwriters contained in Section 10 of this Agreement shall also be for the
benefit of the directors of the Company, the officers of the Company who have
signed the Registration Statement, the Selling Securityholders and any person or
persons who control the Company or any Selling Securityholder within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act. No purchaser of
Securities from any Underwriter shall be deemed a successor because of such
purchase.
17. Applicable Law. The validity and interpretation of this Agreement, and
--------------
the terms and conditions set forth herein, shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to any
provisions relating to conflicts of laws.
18. Consent to Jurisdiction and Service of Process. All judicial
----------------------------------------------
proceedings arising out of or relating to this Agreement may be brought in any
state or federal court of competent jurisdiction in the State of New York, and
by execution and delivery of this Agreement, each Selling Securityholder
accepts, generally and unconditionally, the nonexclusive jurisdiction of the
aforesaid courts and waives any defense of forum non conveniens and irrevocably
agrees to be bound by any judgment rendered thereby in connection with this
Agreement. Each Selling Securityholder designates and appoints [▇▇▇▇ ▇▇▇-▇▇▇▇
▇▇▇] and such other persons as may
-29-
hereafter be selected by the Selling Securityholders irrevocably agreeing in
writing to so serve, as its agent to receive on its behalf service of all
process in any such proceedings in any such court, such service being hereby
acknowledged by each Selling Securityholder to be effective and binding service
in every respect. A copy of any such process so served shall be mailed by
registered mail to each Selling Securityholder at its address provided in
Section 15 hereof; provided, however, that, unless otherwise provided by
-------- -------
applicable law, any failure to mail such copy shall not affect the validity of
service of such process. If any agent appointed by the Selling Securityholders
refuses to accept service, each Selling Securityholder hereby agrees that
service of process sufficient for personal jurisdiction in any action against
such Selling Securityholder in the State of New York may be made by registered
or certified mail, return receipt requested, to the Selling Securityholder at
its address provided in Section 15 hereof, and each Selling Securityholder
hereby acknowledges that such service shall be effective and binding in every
respect. Nothing herein shall affect the right to serve process in any other
manner permitted by law or shall limit the right of any Underwriter to bring
proceedings against the Selling Securityholders in the courts of any other
jurisdiction.
19. Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
-30-
If the foregoing correctly sets forth our understanding, please indicate your
acceptance thereof in the space provided below for that purpose, whereupon this
letter shall constitute an agreement binding the Company and each of the several
Underwriters.
Very truly yours,
PERICOM SEMICONDUCTOR CORPORATION
By____________________________________
Name:______________________________
Title:_____________________________
SELLING SECURITYHOLDERS
By____________________________________
Name:______________________________
Title:_____________________________
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
PRUDENTIAL SECURITIES INCORPORATED
CIBC WORLD MARKETS CORP.
SOUNDVIEW TECHNOLOGY GROUP, INC.
▇.▇. ▇▇▇▇▇▇▇▇▇, TOWBIN
By PRUDENTIAL SECURITIES INCORPORATED
By ______________________________________
▇▇▇▇-▇▇▇▇▇▇ Canfin
Managing Director
For itself and on behalf of the Representatives.
-31-
SCHEDULE I
UNDERWRITERS
Number of Firm
Securities to
Underwriter be Purchased
----------- ------------
Prudential Securities Incorporated......................
CIBC World Markets Corp.................................
Soundview Technology Group, Inc.........................
▇.▇. ▇▇▇▇▇▇▇▇▇, Towbin..................................
Total................................................... ____________
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SCHEDULE II
Name of Selling Securityholder Number of Option Securities to be Sold
------------------------------ --------------------------------------
▇▇▇▇ ▇▇▇-▇▇▇▇ ▇▇▇ 100,000
Chi-▇▇▇▇ ▇▇▇ 50,000
-33-
