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EXHIBIT 1.1
SILICON ENERGY CORP.
COMMON STOCK $0.001 PAR VALUE
UNDERWRITING AGREEMENT
, 2000
Goldman, Sachs & Co.
CIBC World Markets Corp.
Lehman Brothers Inc.
Stephens Inc.
As representatives of the several Underwriters
named in Schedule I hereto
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Ladies and Gentlemen:
Silicon Energy Corp., a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the Underwriters named in Schedule I hereto (the "Underwriters") an aggregate
of shares (the "Firm Shares") and, at the election of the
Underwriters, up to additional shares (the "Optional Shares") of
Common Stock $0.001 par value ("Stock") of the Company (the Firm Shares and the
Optional Shares that the Underwriters elect to purchase pursuant to Section 2
hereof being collectively called the "Shares").
1. The Company represents and warrants to, and agrees with,
each of the Underwriters that:
(a) A registration statement on Form S-1 (File No. 33-....)
(the "Initial Registration Statement") in respect of the Shares has been filed
with the Securities and Exchange Commission (the "Commission"); the Initial
Registration Statement and any post-effective amendment thereto, each in the
form heretofore delivered to you, and, excluding exhibits thereto, to you for
each of the other Underwriters, have been declared effective by the Commission
in such form; other than a registration statement, if any, increasing the size
of the offering (a "Rule 462(b) Registration Statement"), filed pursuant to Rule
462(b) under the Securities Act of 1933, as amended (the "Act"), which became
effective upon filing, no other document with respect to the Initial
Registration Statement has heretofore been filed with the Commission; and no
stop order suspending the
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effectiveness of the Initial Registration Statement, any post-effective
amendment thereto or the Rule 462(b) Registration Statement, if any, has been
issued and no proceeding for that purpose has been initiated or, to the
Company's knowledge, threatened by the Commission (any preliminary prospectus
included in the Initial Registration Statement or filed with the Commission
pursuant to Rule 424(a) of the rules and regulations of the Commission under the
Act is hereinafter called a "Preliminary Prospectus"; the various parts of the
Initial Registration Statement and the Rule 462(b) Registration Statement, if
any, including all exhibits thereto and including the information contained in
the form of final prospectus filed with the Commission pursuant to Rule 424(b)
under the Act in accordance with Section 5(a) hereof and deemed by virtue of
Rule 430A under the Act to be part of the Initial Registration Statement at the
time it was declared effective, each as amended at the time such part of the
Initial Registration Statement became effective or such part of the Rule 462(b)
Registration Statement, if any, became or hereafter becomes effective, are
hereinafter collectively called the "Registration Statement"; and such final
prospectus, in the form first filed pursuant to Rule 424(b) under the Act, is
hereinafter called the "Prospectus");
(b) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all material respects to
the requirements of the Act and the rules and regulations of the Commission
thereunder, and did not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter through Goldman, Sachs & Co. expressly for use therein;
(c) The Registration Statement conforms, and the Prospectus
and any further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of the Act
and the rules and regulations of the Commission thereunder and do not and will
not, as of the applicable effective date as to the Registration Statement and
any amendment thereto, and as of the applicable filing date as to the Prospectus
and any amendment or supplement thereto, contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided, however, that
this representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information furnished in writing to
the Company by an Underwriter through Goldman, Sachs & Co. expressly for use
therein;
(d) Neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial statements included in
the Prospectus any loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than as set
forth or contemplated in the Prospectus and except for any loss or interference
that has not had and could not reasonably be expected to have a material adverse
effect on the general affairs, management, financial position, stockholders'
equity or results of operations of the Company and its subsidiaries, taken as a
whole; and, since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there has not been any change in the
capital stock or long-term debt of the Company or any of its subsidiaries or any
material adverse change, or any development involving a prospective material
adverse change, in or affecting the general affairs, management,
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financial position, stockholders' equity or results of operations of the Company
and its subsidiaries, otherwise than as set forth or contemplated in the
Prospectus;
(e) The Company and its subsidiaries own no real property; and
any real property and buildings held under lease by the Company and its
subsidiaries are held by them under valid, subsisting and enforceable leases
with such exceptions as are not material and do not interfere with the use made
and proposed to be made of such property and buildings by the Company and its
subsidiaries;
(f) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, with power and authority (corporate and other) to own its properties
and conduct its business as described in the Prospectus, and has been duly
qualified as a foreign corporation for the transaction of business and is in
good standing under the laws of each other jurisdiction in which it owns or
leases properties or conducts any business so as to require such qualification,
or is subject to no material liability or disability by reason of the failure to
be so qualified in any such jurisdiction; and each subsidiary of the Company has
been duly incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation;
(g) The Company has an authorized capitalization as set forth
in the Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued, are fully paid and
non-assessable and conform to the description of the Stock contained in the
Prospectus in all material respects; and all of the issued shares of capital
stock of each subsidiary of the Company have been duly and validly authorized
and issued, are fully paid and non-assessable and (except for directors'
qualifying shares) are owned directly or indirectly by the Company, free and
clear of all liens, encumbrances, equities or claims;
(h) The Shares have been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein, will be duly
and validly issued and fully paid and non-assessable and will conform to the
description of the Stock contained in the Prospectus in all material respects;
(i) The issue and sale of the Shares by the Company and the
compliance by the Company with all of the provisions of this Agreement and the
consummation of the transactions herein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other material agreement or material instrument to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, nor will such action result in
any violation of the provisions of the Certificate of Incorporation or By-laws
of the Company or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their properties; and no consent, approval,
authorization, order, registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of the Shares or
the consummation by the Company of the transactions contemplated by this
Agreement, except the registration under the Act of the Shares and such
consents, approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with the purchase
and distribution of the Shares by the Underwriters;
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(j) Neither the Company nor any of its subsidiaries is (i) in
violation of its Certificate of Incorporation or By-laws or (ii) in default in
the performance or observance of any obligation, agreement, covenant or
condition contained in any indenture, mortgage, deed of trust, loan agreement,
lease or other agreement or instrument to which it is a party or by which it or
any of its properties may be bound which default, in the case of clause (ii)
could reasonably be expected to have a material adverse effect on the financial
position, stockholders' equity, results of operation or business of the Company
and its subsidiaries, taken as a whole;
(k) The statements set forth in the Prospectus under the
caption "Description of Capital Stock", insofar as they purport to constitute a
summary of the terms of the Stock and under the caption "Underwriting", insofar
as they purport to describe the provisions of the laws and documents referred to
therein, are accurate and complete;
(l) Other than as set forth in the Prospectus, there are no
legal or governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any of its
subsidiaries is the subject which, if determined adversely to the Company or any
of its subsidiaries, would individually or in the aggregate reasonably be
expected to have a material adverse effect on the current or future consolidated
financial position, stockholders' equity or results of operations of the Company
and its subsidiaries; and, to the Company's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by others;
(m) The Company is not and, after giving effect to the
offering and sale of the Shares, will not be an "investment company", as such
term is defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act");
(n) Neither the Company nor any of its affiliates does
business with the government of Cuba or with any person or affiliate located in
Cuba within the meaning of Section 517.075, Florida Statutes;
(o) To the Company's knowledge, PricewaterhouseCoopers LLP,
who have certified certain financial statements of the Company, are independent
public accountants as required by the Act and the rules and regulations of the
Commission thereunder;
(p) Each of the Company and its subsidiaries owns or
possesses, or can acquire or license on reasonable terms, all patents, patent
rights, licenses, inventions, copyrights, know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks or trade names (collectively,
"Intellectual Property") necessary to carry on the business as described in the
Prospectus, except as set forth in the Prospectus, neither the Company nor any
of its subsidiaries has received any notice of infringement of or conflict with
asserted rights of others with respect to any Intellectual Property, except as
would not have a material adverse effect on the business financial condition,
results of operations or prospects of the Company, nor is otherwise aware of any
infringement of or conflict with asserted rights of others with respect to any
Intellectual Property, except as would not have a material adverse effect on the
business financial condition, results of operations or prospects of the Company,
(q) Each of the Company and its subsidiaries possesses such
permits, licenses, approvals, consents and other authorizations (collectively,
"Governmental Licenses") issued by the appropriate federal, state, local or
foreign regulatory agencies or bodies necessary to conduct the business now
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operated by them; they are in compliance with the terms and conditions of all
such Governmental Licenses; all of the Governmental Licenses are valid and in
full force and effect; and the Company has not received any notice of
proceedings relating to the revocation or modification of any such Governmental
Licenses;
(r) The Company has no "significant subsidiaries" as such term
is defined in Rule 1-102 (w) of Regulation S-X under the Securities Act;
(s) The financial statements included in the Registration
Statement and the Prospectus, together with the related schedules and notes,
present fairly the financial position of the Company and its consolidated
subsidiaries at the dates indicated and the statement of operations,
stockholders' equity and cash flows of the Company and its consolidated
subsidiaries for the periods specified; said financial statements have been
prepared in conformity with generally accepted accounting principles ("GAAP")
applied on a consistent basis throughout the periods involved. The supporting
schedules included in the Registration Statement present fairly in accordance
with GAAP the information required to be stated therein. The selected financial
data and the summary financial information included in the Prospectus present
fairly the information shown therein and have been compiled on a basis
consistent with that of the audited financial statements included in the
Registration Statement;
(t) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific authorizations;
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences; and
(u) Other than any rights that have been effectively waived,
there are no persons with registration rights or other similar rights to have
any securities registered pursuant to the Registration Statement.
2. Subject to the terms and conditions herein set forth, (a)
the Company agrees to issue and sell to each of the Underwriters, and each of
the Underwriters agrees, severally and not jointly, to purchase from the
Company, at a purchase price per share of $ , the number of Firm
Shares set forth opposite the name of such Underwriter in Schedule I hereto and
(b) in the event and to the extent that the Underwriters shall exercise the
election to purchase Optional Shares as provided below, the Company agrees to
issue and sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company, at the purchase price
per share set forth in clause (a) of this Section 2, that portion of the number
of Optional Shares as to which such election shall have been exercised (to be
adjusted by you so as to eliminate fractional shares) determined by multiplying
such number of Optional Shares by a fraction, the numerator of which is the
maximum number of Optional Shares which such Underwriter is entitled to purchase
as set forth opposite the name of such Underwriter in Schedule I hereto and the
denominator of which is the maximum number of Optional Shares that all of the
Underwriters are entitled to purchase hereunder.
The Company hereby grants to the Underwriters the right to
purchase at their election up to Optional Shares, at the purchase
price per share set forth in the paragraph above, for the
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sole purpose of covering sales of shares in excess of the number of Firm Shares.
Any such election to purchase Optional Shares may be exercised only by written
notice from you to the Company, given within a period of 30 calendar days after
the date of this Agreement, setting forth the aggregate number of Optional
Shares to be purchased and the date on which such Optional Shares are to be
delivered, as determined by you but in no event earlier than the First Time of
Delivery (as defined in Section 4 hereof) or, unless you and the Company
otherwise agree in writing, earlier than two or later than ten business days
after the date of such notice.
3. Upon the authorization by you of the release of the Firm
Shares, the several Underwriters propose to offer the Firm Shares for sale upon
the terms and conditions set forth in the Prospectus.
4 (a) The Shares to be purchased by each Underwriter
hereunder, in definitive form, and in such authorized denominations and
registered in such names as Goldman, Sachs & Co. may request upon at least
forty-eight hours' prior notice to the Company shall be delivered by or on
behalf of the Company to Goldman, Sachs & Co., through the facilities of the
Depository Trust Company ("DTC"), for the account of such Underwriter, against
payment by or on behalf of such Underwriter of the purchase price therefor by
wire transfer of Federal (same-day) funds to the account specified by the
Company to Goldman, Sachs & Co. at least forty-eight hours in advance. The
Company will cause the certificates representing the Shares to be made available
for checking and packaging at least twenty-four hours prior to the Time of
Delivery (as defined below) with respect thereto at the office of DTC or its
designated custodian (the "Designated Office"). The time and date of such
delivery and payment shall be, with respect to the Firm Shares, 9:30 a.m., New
York City time, on 2000 or such other time and date as Goldman,
Sachs & Co. and the Company may agree upon in writing, and, with respect to the
Optional Shares, 9:30 a.m., New York time, on the date specified by Goldman,
Sachs & Co. in the written notice given by Goldman, Sachs & Co. of the
Underwriters' election to purchase such Optional Shares, or such other time and
date as Goldman, Sachs & Co. and the Company may agree upon in writing. Such
time and date for delivery of the Firm Shares is herein called the "First Time
of Delivery", such time and date for delivery of the Optional Shares, if not the
First Time of Delivery, is herein called the "Second Time of Delivery", and each
such time and date for delivery is herein called a "Time of Delivery".
(b) The documents to be delivered at each Time of Delivery by
or on behalf of the parties hereto pursuant to Section 7 hereof, including the
cross receipt for the Shares and any additional documents requested by the
Underwriters pursuant to Section 7 hereof, will be delivered at the offices of
Wilson Sonsini Goodrich & Rosati, Professional Corporation, 650 Page Mill Road,
Palo Alto, California 94304, (the "Closing Location"), and the Shares will be
delivered at the Designated Office, all at such Time of Delivery. A meeting will
be held at the Closing Location at p.m., New York City time, on the New
York Business Day next preceding such Time of Delivery, at which meeting the
final drafts of the documents to be delivered pursuant to the preceding sentence
will be available for review by the parties hereto. For the purposes of this
Section 4, "New York Business Day" shall mean each Monday, Tuesday, Wednesday,
Thursday and Friday which is not a day on which banking institutions in New York
are generally authorized or obligated by law or executive order to close.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved
by you and to file such Prospectus pursuant to Rule 424(b)
under the Act not later than the Commission's close of
business on
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the second business day following the execution and delivery
of this Agreement, or, if applicable, such earlier time as may
be required by Rule 430A(a)(3) under the Act; to make no
further amendment or any supplement to the Registration
Statement or Prospectus which shall be disapproved by you
promptly after reasonable notice thereof; to advise you,
promptly after it receives notice thereof, of the time when
any amendment to the Registration Statement has been filed or
becomes effective or any supplement to the Prospectus or any
amended Prospectus has been filed and to furnish you with
copies thereof; to advise you, promptly after it receives
notice thereof, of the issuance by the Commission of any stop
order or of any order preventing or suspending the use of any
Preliminary Prospectus or prospectus, of the suspension of the
qualification of the Shares for offering or sale in any
jurisdiction, of the initiation or threatening of any
proceeding for any such purpose, or of any request by the
Commission for the amending or supplementing of the
Registration Statement or Prospectus or for additional
information; and, in the event of the issuance of any stop
order or of any order preventing or suspending the use of any
Preliminary Prospectus or prospectus or suspending any such
qualification, promptly to use its best efforts to obtain the
withdrawal of such order;
(b) Promptly from time to time to take such action
as you may reasonably request to qualify the Shares for
offering and sale under the securities laws of such
jurisdictions as you may request and to comply with such laws
so as to permit the continuance of sales and dealings therein
in such jurisdictions for as long as may be necessary to
complete the distribution of the Shares, provided that in
connection therewith the Company shall not be required to
qualify as a foreign corporation or to file a general consent
to service of process in any jurisdiction;
(c) Prior to 10:00 A.M., New York City time, on
the New York Business Day next succeeding the date of this
Agreement and from time to time, to furnish the Underwriters
with copies of the Prospectus in New York City in such
quantities as you may reasonably request, and, if the delivery
of a prospectus is required at any time prior to the
expiration of nine months after the time of issue of the
Prospectus in connection with the offering or sale of the
Shares and if at such time any event shall have occurred as a
result of which the Prospectus as then amended or supplemented
would include an untrue statement of a material fact or omit
to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made when such Prospectus is delivered, not
misleading, or, if for any other reason it shall be necessary
during such period to amend or supplement the Prospectus in
order to comply with the Act, to notify you and upon your
request to prepare and furnish without charge to each
Underwriter and to any dealer in securities as many copies as
you may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus which will
correct such statement or omission or effect such compliance,
and in case any Underwriter is required to deliver a
prospectus in connection with sales of any of the Shares at
any time nine months or more after the time of issue of the
Prospectus, upon your request but at the expense of such
Underwriter, to prepare and deliver to such Underwriter as
many copies as you may request of an amended or supplemented
Prospectus complying with Section 10(a)(3) of the Act;
(d) To make generally available to its
securityholders as soon as practicable, but in any event not
later than eighteen months after the effective date of the
Registration Statement (as defined in Rule 158(c) under the
Act), an earnings statement of the Company and its
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subsidiaries (which need not be audited) complying with
Section 11(a) of the Act and the rules and regulations
thereunder (including, at the option of the Company, Rule
158);
(e) During the period beginning from the date
hereof and continuing to and including the date 180 days after
the date of the Prospectus, not to offer, sell, contract to
sell or otherwise dispose of, except as provided hereunder,
any securities of the Company that are substantially similar
to the Shares, including but not limited to any securities
that are convertible into or exchangeable for, or that
represent the right to receive, Stock or any such
substantially similar securities (other than (i) pursuant to
employee stock option plans or stock purchase plans existing
on, or upon the conversion or exchange of convertible or
exchangeable securities outstanding as of, the date of this
Agreement or (ii) pursuant to an acquisition transaction,
provided that any person who acquires securities of the
Company in this manner agrees not to offer, sell, contract to
sell or otherwise dispose of such securities and continuing to
and including the date 180 days after the date of the
Prospectus), without your prior written consent;
(f) To furnish to its stockholders as soon as
practicable after the end of each fiscal year an annual report
(including a balance sheet and statements of income,
stockholders' equity and cash flows of the Company and its
consolidated subsidiaries certified by independent public
accountants) and, as soon as practicable after the end of each
of the first three quarters of each fiscal year (beginning
with the fiscal quarter ending after the effective date of the
Registration Statement), to make available to its stockholders
consolidated unaudited summary financial information of the
Company and its subsidiaries for such quarter in reasonable
detail;
(g) During a period of five years from the
effective date of the Registration Statement, to furnish to
you copies of all reports or other communications (financial
or other) furnished to stockholders, and to deliver to you (i)
as soon as they are available, copies of any reports and
financial statements furnished to or filed with the Commission
or any national securities exchange on which any class of
securities of the Company is listed; and (ii) such additional
non-confidential information concerning the business and
financial condition of the Company as you may from time to
time reasonably request (such financial statements to be on a
consolidated basis to the extent the accounts of the Company
and its subsidiaries are consolidated in reports furnished to
its stockholders generally or to the Commission);
(h) To use the net proceeds received by it from
the sale of the Shares pursuant to this Agreement in the
manner specified in the Prospectus under the caption "Use of
Proceeds";
(i) To use its best efforts to list for quotation
the Shares on the National Association of Securities Dealers
Automated Quotations National Market System ("NASDAQ");
(j) To file with the Commission such information
on Form 10-Q or Form 10-K as may be required by Rule 463 under
the Act; and
(k) If the Company elects to rely upon Rule
462(b), the Company shall file a Rule 462(b) Registration
Statement with the Commission in compliance with Rule 462(b)
by 10:00 P.M., Washington, D.C. time, on the date of this
Agreement, and the Company shall at the time of filing either
pay to the Commission the filing fee for the Rule 462(b)
Registration Statement or give irrevocable instructions for
the payment of such fee pursuant to Rule 111(b) under the Act.
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6. The Company covenants and agrees with the several
Underwriters that the Company will pay or cause to be paid the following: (i)
the fees, disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Shares under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or producing
any Agreement among Underwriters, this Agreement, the Blue Sky Memorandum,
closing documents (including any compilations thereof) and any other documents
in connection with the offering, purchase, sale and delivery of the Shares;
(iii) all expenses in connection with the qualification of the Shares for
offering and sale under state securities laws as provided in Section 5(b)
hereof, including the fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky survey;
(iv) all fees and expenses in connection with listing the Shares on the NASDAQ;
(v) the filing fees incident to, and the fees and disbursements of counsel for
the Underwriters in connection with, securing any required review by the
National Association of Securities Dealers, Inc. of the terms of the sale of the
Shares; (vi) the cost of preparing stock certificates; (vii) the cost and
charges of any transfer agent or registrar; and (viii) all other costs and
expenses incident to the performance of its obligations hereunder which are not
otherwise specifically provided for in this Section. It is understood, however,
that, except as provided in this Section, and Sections 8 and 11 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees of
their counsel, stock transfer taxes on resale of any of the Shares by them, and
any advertising expenses connected with any offers they may make.
7. The obligations of the Underwriters hereunder, as to the
Shares to be delivered at each Time of Delivery, shall be subject, in their
discretion, to the condition that all representations and warranties and other
statements of the Company herein are, at and as of such Time of Delivery, true
and correct, the condition that the Company shall have performed all of its
obligations hereunder theretofore to be performed, and the following additional
conditions:
(a) The Prospectus shall have been filed with the
Commission pursuant to Rule 424(b) within the applicable time
period prescribed for such filing by the rules and regulations
under the Act and in accordance with Section 5(a) hereof; if
the Company has elected to rely upon Rule 462(b), the Rule
462(b) Registration Statement shall have become effective by
10:00 P.M., Washington, D.C. time, on the date of this
Agreement; no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been
issued and no proceeding for that purpose shall have been
initiated or threatened by the Commission; and all requests
for additional information on the part of the Commission shall
have been complied with to your reasonable satisfaction;
(b) Simpson Thacher & Bartlett, counsel for the
Underwriters, shall have furnished to you such written opinion
or opinions (a draft of each such opinion is attached as Annex
II(a) hereto), dated such Time of Delivery, with respect to
the matters covered in paragraphs (i), (ii), (vii), (xi) and
(xiii) of subsection (c) below as well as such other related
matters as you may reasonably request, and such counsel shall
have received such papers and information as they may
reasonably request to enable them to pass upon such matters;
(c) Wilson Sonsini Goodrich & Rosati, Professional
Corporation, counsel for the Company, shall have furnished to
you their written opinion (a draft of such opinion is attached
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as Annex II(b) hereto), dated such Time of Delivery, in form
and substance satisfactory to you, 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 the State of Delaware,
with power and authority (corporate and other) to own
its properties and conduct its business as described
in the Prospectus;
(ii) The Company has an authorized
capitalization as set forth in the Prospectus, and
all of the issued shares of capital stock of the
Company (including the Shares being delivered at such
Time of Delivery) have been duly and validly
authorized and issued and are, and, in the case of
Shares being delivered at such Time of Delivery, upon
the company's receipt of the consideration therefore
as provided in this Agreement, will be, fully paid
and non-assessable; and the Shares conform as to the
legal matters to the description of the Stock
contained in the Prospectus;
(iii) The Company has been duly qualified as
a foreign corporation for the transaction of business
and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or
conducts any business so as to require such
qualification or is subject to no material liability
or disability by reason of failure to be so qualified
in any such jurisdiction (such counsel being entitled
to rely in respect of the opinion in this clause upon
opinions of local counsel and in respect of matters
of fact upon certificates of officers of the Company,
provided that such counsel shall state that they
believe that both you and they are justified in
relying upon such opinions and certificates);
(iv) Each subsidiary of 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 all of the issued
shares of capital stock of each such subsidiary have
been duly and validly authorized and issued, are
fully paid and non-assessable, and (except for
directors' qualifying shares) are owned directly or
indirectly by the Company, free and clear of all
liens, encumbrances, equities or claims (such counsel
being entitled to rely in respect of the opinion in
this clause upon opinions of local counsel and in
respect to matters of fact upon certificates of
officers of the Company or its subsidiaries, provided
that such counsel shall state that they believe that
both you and they are justified in relying upon such
opinions and certificates);
(v) To such counsel's knowledge, the Company
and its subsidiaries own no real property, and any
real property and buildings held under lease by the
Company or its subsidiaries are held by them under
valid, subsisting and enforceable leases (assuming
due authorization, execution and delivery of such
leases by the lessors) with such exceptions as are
not material and do not interfere with the use made
of such property and buildings by the Company and its
subsidiaries (in giving the opinion in this clause,
such counsel may state that they are relying upon
opinions of local counsel and abstracts, reports and
policies of title companies rendered or issued at or
subsequent to the time of acquisition of such
property by the Company or its subsidiaries, upon
opinions of counsel to the lessors of such property
and, in
10
<PAGE> 11
respect to matters of fact, upon certificates of
officers of the Company or its subsidiaries, provided
that such counsel shall state that they believe that
both you and they are justified in relying upon such
opinions, abstracts, reports, policies and
certificates);
(vi) To such counsel's knowledge and other
than as set forth in the Prospectus, there are no
legal or governmental proceedings pending to which
the Company or any of its subsidiaries is a party or
of which any property of the Company or any of its
subsidiaries is the subject that are required to be
described in the Prospectus in accordance with the
Act and the rules and regulations of the Commission
thereunder and are not so described; and, to such
counsel's knowledge, no proceedings that would
require such disclosure are threatened or
contemplated by governmental authorities or
threatened by others;
(vii) This Agreement has been duly
authorized, executed and delivered by the Company;
(viii) The issue and sale of the Shares
being delivered at such Time of Delivery by the
Company and the compliance by the Company with all of
the provisions of this Agreement and the consummation
of the transactions herein contemplated will not (i)
conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or
instrument which is material to the Company and known
to such counsel to which the Company or any of its
subsidiaries is a party or by which the Company or
any of its subsidiaries is bound or to which any of
the property or assets of the Company or any of its
subsidiaries is subject, (ii) result in any violation
of the provisions of the Certificate of Incorporation
or By-laws of the Company or (iii) result in any
violation of any statute or any order, rule or
regulation known to such counsel of any court or
governmental agency or body having jurisdiction over
the Company or any of its subsidiaries or any of
their properties;
(ix) No consent, approval, authorization,
order, registration or qualification of or with any
such court or governmental agency or body is required
for the issue and sale of the Shares or the
consummation by the Company of the transactions
contemplated by this Agreement, except the
registration under the Act of the Shares, and such
consents, approvals, authorizations, registrations or
qualifications as may be required under state
securities or Blue Sky laws in connection with the
purchase and distribution of the Shares by the
Underwriters;
(x) Neither the Company nor any of its
subsidiaries is in violation of its Certificate of
Incorporation or By-laws or in default in the
performance or observance of any material obligation,
agreement, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement,
lease or other agreement or instrument filed or
required to be filed as an Exhibit to the
Registration Statement to which it is a party or by
which it or any of its properties may be bound;
(xi) The statements set forth in the
Prospectus under the caption "Description of Capital
Stock", insofar as they purport to constitute a
summary of the terms of the Stock and under the
caption "Underwriting", insofar as they purport to
describe the
11
<PAGE> 12
provisions of the laws and documents referred to
therein, are accurate, complete and fair in all
material respects;
(xii) The Company is not an "investment
company", as such term is defined in the Investment
Company Act; and
(xiii) The Registration Statement and the
Prospectus and any further amendments and supplements
thereto made by the Company prior to such Time of
Delivery (other than the financial statements and
related schedules therein, as to which such counsel
need express no opinion) comply as to form in all
material respects with the requirements of the Act
and the rules and regulations thereunder; and they do
not know of any amendment to the Registration
Statement required to be filed or of any contracts or
other documents of a character required to be filed
as an exhibit to the Registration Statement or
required to be described in the Registration
Statement or the Prospectus that are not filed or
described as required.
The opinion shall also state that although they do not assume
any responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus, except for those
referred to in the opinion in subsection (xi) of this section 7(c), they have no
reason to believe that, as of its effective date, the Registration Statement or
any further amendment thereto made by the Company prior to such Time of Delivery
(other than the financial data, financial statements and related schedules
therein, as to which such counsel need express no opinion) contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading or
that, as of its date, the Prospectus or any further amendment or supplement
thereto made by the Company prior to such Time of Delivery (other than the
financial data, financial statements and related schedules therein, as to which
such counsel need express no opinion) contained an untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading or that, as of such Time of Delivery, either the
Registration Statement or the Prospectus or any further amendment or supplement
thereto made by the Company prior to such Time of Delivery (other than the
financial data, financial statements and related schedules therein, as to which
such counsel need express no opinion) contains an untrue statement of a material
fact or omits to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading;
(d) On the date of the Prospectus at a time prior
to the execution of this Agreement, at 9:30 a.m., New York
City time, on the effective date of any post-effective
amendment to the Registration Statement filed subsequent to
the date of this Agreement and also at each Time of Delivery,
PricewaterhouseCoopers LLP shall have furnished to you a
letter or letters, dated the respective dates of delivery
thereof, in form and substance satisfactory to you, to the
effect set forth in Annex I hereto (the executed copy of the
letter delivered prior to the execution of this Agreement is
attached as Annex I(a) hereto and a draft of the form of
letter to be delivered on the effective date of any
post-effective amendment to the Registration Statement and as
of each Time of Delivery is attached as Annex I(b) hereto);
12
<PAGE> 13
(e) (i) Neither the Company nor any of its
subsidiaries shall have sustained since the date of the latest
audited financial statements included in the Prospectus any
loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance,
or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated
in the Prospectus, and (ii) since the respective dates as of
which information is given in the Prospectus there shall not
have been any change in the capital stock, or long-term debt
of the Company or any of its subsidiaries or any change, or
any development involving a prospective change, in or
affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company
and its subsidiaries, otherwise than as set forth or
contemplated in the Prospectus, the effect of which, in any
such case described in clause (i) or (ii), is in the judgment
of the Representatives so material and adverse as to make it
impracticable or inadvisable to proceed with the public
offering or the delivery of the Shares being delivered at such
Time of Delivery on the terms and in the manner contemplated
in the Prospectus;
(f) On or after the date hereof (i) no downgrading
shall have occurred in the rating accorded the Company's debt
securities or preferred stock by any "nationally recognized
statistical rating organization", as that term is defined by
the Commission for purposes of Rule 436(g)(2) under the Act,
and (ii) no such organization shall have publicly announced
that it has under surveillance or review, with possible
negative implications, its rating of any of the Company's debt
securities or preferred stock;
(g) On or after the date hereof there shall not
have occurred any of the following: (i) a suspension or
material limitation in trading in securities generally on the
New York Stock Exchange or on NASDAQ; (ii) a suspension or
material limitation in trading in the Company's securities on
NASDAQ; (iii) a general moratorium on commercial banking
activities declared by either Federal or New York or
California State authorities; or (iv) the outbreak or
escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or
war, if the effect of any such event specified in this clause
(iv) in the judgment of the Representatives makes it
impracticable or inadvisable to proceed with the public
offering or the delivery of the Shares being delivered at such
Time of Delivery on the terms and in the manner contemplated
in the Prospectus;
(h) The Shares to be sold at such Time of Delivery
shall have been duly listed, subject to notice of issuance,
for quotation on NASDAQ;
(i) The Company shall have obtained and delivered
to the Underwriters executed copies of an agreement from the
directors and executive officers of the Company, and from such
stockholders of the Company who, in the aggregate,
beneficially own ninety-nine percent (99%) of the shares of
Stock of the Company prior to the Offering of the Shares,
substantially to the effect set forth in Subsection 5(e)
hereof in form and substance satisfactory to you;
(j) The Company shall have complied with the
provisions of Section 5(c) hereof with respect to the
furnishing of prospectuses on the New York Business Day next
succeeding the date of this Agreement; and
(k) The Company shall have furnished or caused to
be furnished to you at such Time of Delivery certificates of
officers of the Company satisfactory to you as to the accuracy
of the representations and warranties of the Company herein at
and as of such Time of Delivery, as to the performance by the
Company of all of its obligations hereunder to be performed at
or prior to such Time of Delivery, as
13
<PAGE> 14
to the matters set forth in subsections (a) and (e) of this
Section and as to such other matters as you may reasonably
request.
8. (a) The Company will indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse each Underwriter for
any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such action or claim as such
expenses are incurred; provided, however, that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in any Preliminary Prospectus, the
Registration Statement or the Prospectus or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through Goldman, Sachs & Co. expressly for use
therein.
(b) Each Underwriter will indemnify and hold harmless the
Company against any losses, claims, damages or liabilities to which the Company
may become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
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 any
Preliminary Prospectus, the Registration Statement or the Prospectus or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through Goldman, Sachs
& Co. expressly for use therein; and will reimburse the Company for any legal or
other expenses reasonably incurred by the Company in connection with
investigating or defending any such action or claim as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party
14
<PAGE> 15
under such subsection for any legal expenses of other counsel or any other
expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the written consent of the
indemnified party, effect the settlement or compromise of, or consent to the
entry of any judgment with respect to, any pending or threatened action or claim
in respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified party is an actual or potential party to such
action or claim) unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability arising out of
such action or claim and (ii) does not include a statement as to or an admission
of fault, culpability or a failure to act, by or on behalf of any indemnified
party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party 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 the
relative benefits received by the Company on the one hand and the Underwriters
on the other from the offering of the Shares. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law or if the indemnified party failed to give the notice required under
subsection (c) above, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other shall be deemed to be
in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the Prospectus. The relative fault shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the one hand
or the Underwriters on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this subsection (d) were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above in this subsection (d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
in this subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
subsection (d), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Shares underwritten
by it and distributed to the public were offered to the public exceeds the
amount of any damages which such Underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The
15
<PAGE> 16
Underwriters' obligations in this subsection (d) to contribute are several in
proportion to their respective underwriting obligations and not joint.
(e) The obligations of the Company under this Section 8 shall
be in addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who controls
any Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company and to each
person, if any, who controls the Company within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to
purchase the Shares which it has agreed to purchase hereunder at a Time of
Delivery, you may in your discretion arrange for you or another party or other
parties to purchase such Shares on the terms contained herein. If within
thirty-six hours after such default by any Underwriter you do not arrange for
the purchase of such Shares, then the Company shall be entitled to, but not
required to use, a further period of thirty-six hours within which to procure
another party or other parties satisfactory to you to purchase such Shares on
such terms. In the event that, within the respective prescribed periods, you
notify the Company that you have so arranged for the purchase of such Shares, or
the Company notifies you that it has so arranged for the purchase of such
Shares, you or the Company shall have the right to postpone such Time of
Delivery for a period of not more than seven days, in order to effect whatever
changes may thereby be made necessary in the Registration Statement or the
Prospectus, or in any other documents or arrangements, and the Company agrees to
file promptly any amendments to the Registration Statement or the Prospectus
which in your opinion may thereby be made necessary. The term "Underwriter" as
used in this Agreement shall include any person substituted under this Section
with like effect as if such person had originally been a party to this Agreement
with respect to such Shares.
(b) If, after giving effect to any arrangements for the
purchase of the Shares of a defaulting Underwriter or Underwriters by you and
the Company as provided in subsection (a) above, the aggregate number of such
Shares which remains unpurchased does not exceed one-eleventh of the aggregate
number of all the Shares to be purchased at such Time of Delivery, then the
Company shall have the right to require each non-defaulting Underwriter to
purchase the number of shares which such Underwriter agreed to purchase
hereunder at such Time of Delivery and, in addition, to require each
non-defaulting Underwriter to purchase its pro rata share (based on the number
of Shares which such Underwriter agreed to purchase hereunder) of the Shares of
such defaulting Underwriter or Underwriters for which such arrangements have not
been made; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
(c) If, after giving effect to any arrangements for the
purchase of the Shares of a defaulting Underwriter or Underwriters by you and
the Company as provided in subsection (a) above, the aggregate number of such
Shares which remains unpurchased exceeds one-eleventh of the aggregate number of
all the Shares to be purchased at such Time of Delivery, or if the Company shall
not exercise the right described in subsection (b) above to require
non-defaulting Underwriters to purchase Shares of a defaulting Underwriter or
Underwriters, then this Agreement (or, with respect to the Second Time of
Delivery, the obligations of the Underwriters to purchase and of the Company to
sell the Optional Shares) shall thereupon terminate, without liability on the
part of any non-defaulting Underwriter or the Company, except for the expenses
to be borne by the Company and the Underwriters as provided in Section 6 hereof
and the indemnity and contribution agreements
16
<PAGE> 17
in Section 8 hereof; but nothing herein shall relieve a defaulting Underwriter
from liability for its default.
10. The respective indemnities, agreements, representations,
warranties and other statements of the Company and the several Underwriters, as
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
any investigation (or any statement as to the results thereof) made by or on
behalf of any Underwriter or any controlling person of any Underwriter, or the
Company, or any officer or director or controlling person of the Company, and
shall survive delivery of and payment for the Shares.
11. If this Agreement shall be terminated pursuant to Section
9 hereof, the Company shall not then be under any liability to any Underwriter
except as provided in Sections 6 and 8 hereof; but, if for any other reason, any
Shares are not delivered by or on behalf of the Company as provided herein, the
Company will reimburse the Underwriters through you for all out-of-pocket
expenses approved in writing by you, including fees and disbursements of
counsel, reasonably incurred by the Underwriters in making preparations for the
purchase, sale and delivery of the Shares not so delivered, but the Company
shall then be under no further liability to any Underwriter except as provided
in Sections 6 and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each
of the Underwriters, and the parties hereto shall be entitled to act and rely
upon any statement, request, notice or agreement on behalf of any Underwriter
made or given by you jointly or by Goldman, Sachs & Co. on behalf of you as the
representatives.
All statements, requests, notices and agreements hereunder
shall be in writing, and if to the Underwriters shall be delivered or sent by
mail, telex or facsimile transmission to you as the representatives in care of
Goldman, Sachs & Co., 32 Old Slip, 21st Floor, New York, New York 10005,
Attention: Registration Department; and if to the Company shall be delivered or
sent by mail to the address of the Company set forth in the Registration
Statement, Attention: Secretary; provided, however, that any notice to an
Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by mail,
telex or facsimile transmission to such Underwriter at its address set forth in
its Underwriters' Questionnaire, or telex constituting such Questionnaire, which
address will be supplied to the Company by you upon request. Any such
statements, requests, notices or agreements shall take effect upon receipt
thereof.
13. This Agreement shall be binding upon, and inure solely to
the benefit of, the Underwriters, the Company and, to the extent provided in
Sections 8 and 10 hereof, the officers and directors of the Company and each
person who controls the Company or any Underwriter, and their respective heirs,
executors, administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement. No purchaser of
any of the Shares from any Underwriter shall be deemed a successor or assign by
reason merely of such purchase.
14. Time shall be of the essence of this Agreement. As used
herein, the term "business day" shall mean any day when the Commission's office
in Washington, D.C. is open for business.
15. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
17
<PAGE> 18
16. This Agreement may be executed by any one or more of the
parties hereto in any number of counterparts, each of which shall be deemed to
be an original, but all such counterparts shall together constitute one and the
same instrument.
If the foregoing is in accordance with your understanding,
please sign and return to us counterparts hereof, and upon the acceptance hereof
by you, on behalf of each of the Underwriters, this letter and such acceptance
hereof shall constitute a binding agreement between each of the Underwriters and
the Company. It is understood that your acceptance of this letter on behalf of
each of the Underwriters is pursuant to the authority set forth in a form of
Agreement among Underwriters, the form of which shall be submitted to the
Company for examination upon request, but without warranty on your part as to
the authority of the signers thereof.
Very truly yours,
Silicon Energy Corp.
By:
----------------------------------
Name:
Title:
Accepted as of the date hereof:
Goldman, Sachs & Co.
CIBC World Markets Corp.
Lehman Brothers Inc.
Stephens Inc.
By:
----------------------------------
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
18
<PAGE> 19
SCHEDULE I
<TABLE>
<CAPTION>
[NUMBER OF OPTIONAL
SHARES TO BE
TOTAL NUMBER OF PURCHASED IF
FIRM SHARES MAXIMUM OPTION
UNDERWRITER TO BE PURCHASED EXERCISED
----------- --------------- --------------------
<S> <C> <C>
Goldman, Sachs & Co.
CIBC World Markets Corp.
Lehman Brothers Inc.
Stephens Inc.
Total
</TABLE>
<PAGE> 20
ANNEX I
FORM OF COMFORT LETTER
Pursuant to Section 7(d) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of the Act and
the applicable published rules and regulations thereunder;
(ii) In their opinion, the audited financial statements and
any supplementary financial information and schedules examined by them and
included in the Prospectus or the Registration Statement comply as to form in
all material respects with the applicable accounting requirements of the Act and
the related published rules and regulations thereunder; and, if applicable, they
have made a review in accordance with standards established by the American
Institute of Certified Public Accountants of the unaudited consolidated interim
financial statements, selected financial data, pro forma financial information
and/or condensed financial statements derived from audited financial statements
of the Company for the periods specified in such letter, as indicated in their
reports thereon, copies of which have been furnished to the representatives of
the Underwriters (the "Representatives");
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants of the
unaudited condensed consolidated statements of income, consolidated balance
sheets and consolidated statements of cash flows included in the Prospectus as
indicated in their reports thereon copies of which have been separately
furnished to the Representatives and on the basis of specified procedures
including inquiries of officials of the Company who have responsibility for
financial and accounting matters regarding whether the unaudited condensed
consolidated financial statements referred to in paragraph (vi)(A)(i) below
comply as to form in all material respects with the applicable accounting
requirements of the Act and the related published rules and regulations, nothing
came to their attention that cause them to believe that the unaudited condensed
consolidated financial statements do not comply as to form in all material
respects with the applicable accounting requirements of the Act and the related
published rules and regulations;
(iv) The unaudited selected financial information with respect
to the consolidated results of operations and financial position of the Company
for the five most recent fiscal years included in the Prospectus agrees with the
corresponding amounts (after restatements where applicable) in the audited
consolidated financial statements for such five fiscal years which were included
or incorporated by reference in the Company's Annual Reports on Form 10-K for
such fiscal years;
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K and on the
basis of limited procedures specified in such letter nothing came to their
attention as a result of the foregoing procedures that caused them to believe
that this information does not conform in all material respects with the
disclosure requirements of Items 301, 302, 402 and 503(d), respectively, of
F-1
<PAGE> 21
Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards, consisting
of a reading of the unaudited financial statements and other information
referred to below, a reading of the latest available interim financial data of
the Company and its subsidiaries, inspection of the minute books of the Company
and its subsidiaries since the date of the latest audited financial statements
included in the Prospectus, inquiries of officials of the Company and its
subsidiaries responsible for financial and accounting matters and such other
inquiries and procedures as may be specified in such letter, nothing came to
their attention that caused them to believe that:
(A) (i) the unaudited consolidated statements of
income, consolidated balance sheets and consolidated
statements of cash flows included in the Prospectus do not
comply as to form in all material respects with the applicable
accounting requirements of the Act and the related published
rules and regulations, or (ii) any material modifications
should be made to the unaudited condensed consolidated
statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the
Prospectus for them to be in conformity with generally
accepted accounting principles;
(B) any other unaudited income statement data and
balance sheet items included in the Prospectus do not agree
with the corresponding items in the unaudited consolidated
financial statements from which such data and items were
derived, and any such unaudited data and items were not
determined on a basis substantially consistent with the basis
for the corresponding amounts in the audited consolidated
financial statements included in the Prospectus;
(C) the unaudited financial statements which were not
included in the Prospectus but from which were derived any
unaudited condensed financial statements referred to in clause
(A) and any unaudited income statement data and balance sheet
items included in the Prospectus and referred to in clause (B)
were not determined on a basis substantially consistent with
the basis for the audited consolidated financial statements
included in the Prospectus;
(D) any unaudited pro forma consolidated condensed
financial statements included in the Prospectus do not comply
as to form in all material respects with the applicable
accounting requirements of the Act and the published rules and
regulations thereunder or the pro forma adjustments have not
been properly applied to the historical amounts in the
compilation of those statements;
(E) as of a specified date not more than five days
prior to the date of such letter, there have been any changes
in the consolidated capital stock (other than issuances of
capital stock upon exercise of options and stock appreciation
rights, upon earn-outs of performance shares and upon
conversions of convertible securities, in each case which were
outstanding on the date of the latest financial statements
included in the Prospectus) or any increase in the
consolidated long-term debt of the Company and its
subsidiaries, or any decreases in consolidated net current
assets or stockholders' equity or other items specified by
F-2
<PAGE> 22
the Representatives, or any increases in any items specified
by the Representatives, in each case as compared with amounts
shown in the latest balance sheet included in the Prospectus,
except in each case for changes, increases or decreases which
the Prospectus discloses have occurred or may occur or which
are described in such letter; and
(F) for the period from the date of the latest
financial statements included in the Prospectus to the
specified date referred to in clause (E) there were any
decreases in consolidated net revenues or operating profit or
the total or per share amounts of consolidated net income, in
each case as compared with the comparable period of the
preceding year and with any other period of corresponding
length specified by the Representatives, except in each case
for decreases or increases which the Prospectus discloses have
occurred or may occur or which are described in such letter;
and
(vii) In addition to the examination referred to in their
report(s) included in the Prospectus and the limited procedures, inspection of
minute books, inquiries and other procedures referred to in paragraphs (iii) and
(vi) above, they have carried out certain specified procedures, not constituting
an examination in accordance with generally accepted auditing standards, with
respect to certain amounts, percentages and financial information specified by
the Representatives, which are derived from the general accounting records of
the Company and its subsidiaries, which appear in the Prospectus, or in Part II
of, or in exhibits and schedules to, the Registration Statement specified by the
Representatives, and have compared certain of such amounts, percentages and
financial information with the accounting records of the Company and its
subsidiaries and have found them to be in agreement.
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