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EXHIBIT 1.1
Optical Communication Products, Inc.
12,075,000 Shares
Class A Common Stock
($0.001 Par Value)
UNDERWRITING AGREEMENT
November __, 2000
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UNDERWRITING AGREEMENT
November __, 2000
UBS Warburg LLC
J.P. Morgan Securities, Inc.
U.S. Bancorp Piper Jaffray
Wit SoundView Corporation
As representatives of the several underwriters
named in Schedule A hereto
c/o UBS Warburg LLC
299 Park Avenue
New York, New York 10171-0026
Ladies and Gentlemen:
Optical Communication Products, Inc., a Delaware corporation (the
"Company"), proposes to issue and sell to the underwriters named in Schedule A
annexed hereto (the "Underwriters") an aggregate of 10,500,000 shares (the "Firm
Shares") of Class A Common Stock, $0.001 par value (the "Class A Common Stock"),
of the Company. The Class A Common Stock and the Class B Common Stock, $0.001
par value (the "Class B Common Stock"), of the Company are hereinafter
collectively sometimes referred to as the "Common Stock." In addition, solely
for the purpose of covering over-allotments, the Company proposes to grant to
the Underwriters the option to purchase from the Company up to an additional
1,575,000 shares of Class A Common Stock (the "Additional Shares"). The Firm
Shares and the Additional Shares are hereinafter collectively sometimes referred
to as the "Shares". The Shares are described in the Prospectus which is
referred to below.
The Company has filed, in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations thereunder
(collectively called the "Act"), with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-1 (File No. 333-44862)
including a prospectus, relating to the Shares. The Company has furnished to
you, for use by the Underwriters and by dealers, copies of one or more
preliminary prospectuses (each thereof being herein called a Preliminary
Prospectus) relating to the Shares. Except where the context otherwise
requires, the registration statement, as amended when it becomes effective,
including all documents filed as a part thereof, and including any information
contained in a prospectus subsequently filed with the Commission pursuant to
Rule 424(b) under the Act and deemed to be part of the registration statement at
the time of effectiveness pursuant to Rule 430(A) under the Act and also
including any registration statement filed pursuant to Rule 462(b) under the
Act, is herein called the Registration Statement, and the prospectus, in the
form filed by the Company with the Commission pursuant to Rule 424(b) under the
Act on or before the second business day after the date hereof (or such earlier
time as may be required under the Act) or, if no such filing is required, the
form of final prospectus included in the Registration Statement at the time it
became effective, is herein called the Prospectus.
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The Company and the Underwriters agree as follows:
1. Sale and Purchase. Upon the basis of the warranties and representations
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and subject to the terms and conditions herein set forth, the Company agrees to
sell to the respective Underwriters and each of the Underwriters, severally and
not jointly, agrees to purchase from the Company the aggregate number of Firm
Shares set forth opposite the name of such Underwriter in Schedule A attached
hereto in each case at a purchase price of $__________ per Share. The Company is
advised by you that the Underwriters intend (i) to make a public offering of
their respective portions of the Firm Shares as soon after the effective date of
the Registration Statement as in your judgment is advisable and (ii) initially
to offer the Firm Shares upon the terms set forth in the Prospectus. You may
from time to time increase or decrease the public offering price after the
initial public offering to such extent as you may determine.
In addition, the Company hereby grants to the several Underwriters the
option to purchase, and upon the basis of the warranties and representations and
subject to the terms and conditions herein set forth, the Underwriters shall
have the right to purchase, severally and not jointly, from the Company, ratably
in accordance with the number of Firm Shares to be purchased by each of them,
all or a portion of the Additional Shares as may be necessary to cover over-
allotments made in connection with the offering of the Firm Shares, at the same
purchase price per share to be paid by the Underwriters to the Company for the
Firm Shares. This option may be exercised by you on behalf of the several
Underwriters at any time on or before the thirtieth day following the date
hereof, by written notice to the Company. Such notice shall set forth the
aggregate number of Additional Shares as to which the option is being exercised,
and the date and time when the Additional Shares are to be delivered (such date
and time being herein referred to as the "Additional Time of Purchase");
provided, however, that the Additional Time of Purchase shall not be earlier
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than the Time of Purchase (as defined below) nor earlier than the second
business day/1/ after the date on which the option shall have been exercised nor
later than the tenth business day after the date on which the option shall have
been exercised. The number of Additional Shares to be sold to each Underwriter
shall be the number which bears the same proportion to the aggregate number of
Additional Shares being purchased as the number of Firm Shares set forth
opposite the name of such Underwriter on Schedule A hereto bears to the total
number of Firm Shares (subject, in each case, to such adjustment as you may
determine to eliminate fractional shares).
2. Payment and Delivery. Payment of the purchase price for the Firm Shares
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shall be made to the Company by Federal Funds wire transfer, against delivery of
the certificates for the Firm Shares to you through the facilities of the
Depository Trust Company (DTC) for the respective accounts of the Underwriters.
Such payment and delivery shall be made at 10:00 A.M., New York City time, on
__________, 2000 (unless another time shall be agreed to by you and the Company
or unless postponed
__________________________
/1/ As used herein "business day" shall mean a day on which the New York Stock
Exchange is open for trading.
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in accordance with the provisions of Section 8 hereof). The time at which such
payment and delivery are actually made is hereinafter sometimes called the "Time
of Purchase". Certificates for the Firm Shares shall be delivered to you in
definitive form in such names and in such denominations as you shall specify on
the second business day preceding the Time of Purchase. For the purpose of
expediting the checking of the certificates for the Firm Shares by you, the
Company agrees to make such certificates available to you for such purpose at
least one full business day preceding the Time of Purchase.
Payment of the purchase price for the Additional Shares shall be made
at the Additional Time of Purchase in the same manner and at the same office as
the payment for the Firm Shares. Certificates for the Additional Shares shall
be delivered to you in definitive form in such names and in such denominations
as you shall specify no later than the second business day preceding the
Additional Time of Purchase. For the purpose of expediting the checking of the
certificates for the Additional Shares by you, the Company agrees to make such
certificates available to you for such purpose at least one full business day
preceding the Additional Time of Purchase.
3. Representations and Warranties of the Company. The Company represents and
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warrants to each of the Underwriters that:
(a) the Company has not received, and has no notice of, any order of the
Commission preventing or suspending the use of any Preliminary Prospectus, or
instituting proceedings for that purpose, and each Preliminary Prospectus, at
the time of filing thereof, conformed in all material respects to the
requirements of the Act; and when the Registration Statement becomes effective,
the Registration Statement and the Prospectus will fully conform in all material
respects with the requirements of the Act, and the Registration Statement will
not contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and the Prospectus will 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; any statutes, regulations, contracts
or other documents that are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the Registration
Statement have been so described or filed; provided, however, that the Company
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makes no warranty or representation with respect to any statement contained in
the Registration Statement or the Prospectus in reliance upon and in conformity
with information concerning the Underwriters and furnished in writing by or on
behalf of any Underwriter through you to the Company expressly for use in the
Registration Statement or the Prospectus; and the Company has not distributed
any offering material in connection with the offering or sale of the Shares
other than the Registration Statement, the Preliminary Prospectus, the
Prospectus or any other materials, if any, permitted by the Act;
(b) as of the date of this Agreement, the Company has the authorized and
outstanding capitalization as set forth in the section of the Registration
Statement and the Prospectus entitled "Capitalization" and, as of the Time of
Purchase and the Additional Time of Purchase, as the case may be, the Company
shall have an authorized capitalization as set forth under the heading entitled
"Pro Forma As Adjusted" in the
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section of the Registration Statement and the Prospectus entitled
"Capitalization"; all of the issued and outstanding shares of capital stock,
including Class A Common Stock, of the Company have been duly and validly
authorized and issued and are fully paid and non-assessable, have been issued in
compliance with all federal and state securities laws and were not issued in
violation of any preemptive right, resale right, right of first refusal or
similar right;
(c) 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 full
corporate power and authority to own, lease and operate its properties and
conduct its business as described in the Registration Statement;
(d) the Company is duly qualified to do business as a foreign corporation in
good standing in each jurisdiction where the ownership or leasing of its
properties or the conduct of its business requires such qualification, except
where the failure to so qualify or be in good standing would not have a material
adverse effect on the business, properties, financial condition or results of
operation of the Company and its Subsidiary (as hereinafter defined) taken as a
whole (a "Material Adverse Effect"). The Company has no subsidiaries (as defined
in the Rules and Regulations) other than Optical Communication Products (UK)
Ltd. (the "Subsidiary"); the Company owns 100% of the outstanding common stock
of Optical Communication Products (UK) Ltd.; other than the Subsidiary, the
Company does not own, directly or indirectly, any shares of stock or any other
equity or long-term debt securities of any corporation or have any equity
interest in any firm, partnership, joint venture, association or other entity;
complete and correct copies of the certificates of incorporation and of the
bylaws of the Company and the Subsidiary and all amendments thereto have been
delivered to you, and except as set forth in the exhibits to the Registration
Statement no changes thereto will be made subsequent to the date hereof and
prior to the Closing Date or, if later, the Option Closing Date; the Subsidiary
has been duly incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, with full
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Registration Statement; the Subsidiary
is duly qualified to do business as a foreign corporation in good standing in
each jurisdiction where the ownership or leasing of the properties or the
conduct of its business requires such qualification, except where the failure to
so qualify or be in good standing would not have a Material Adverse Effect; all
of the outstanding shares of capital stock of the Subsidiary have been duly
authorized and validly issued, are fully paid and non-assessable and (except as
set forth in the Registration Statement) are owned by the Company subject to no
security interest, other encumbrance or adverse claims; no options, warrants or
other rights to purchase, agreements or other obligations to issue or other
rights to convert any obligation into shares of capital stock or ownership
interests in the Subsidiary are outstanding;
(e) each of the agreements (the "Reincorporation Agreements") entered into by
the Company in connection with the changing of its state of incorporation from
California to Delaware (the "Reincorporation") has been duly and validly
authorized, executed and delivered by the Company, are in full force and effect,
and constitutes a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms and, to the knowledge of the
Company, is a valid and binding obligation of each other party thereto,
enforceable against each party in accordance with its terms. The
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Reincorporation has been validly effected in accordance with the laws of the
states of California and Delaware;
(f) neither the Company nor its Subsidiary is in breach of, or in default under
(nor has any event occurred which with notice, lapse of time, or both would
result in any breach of, or constitute a default under), its respective charter
or bylaws or in the performance or observance of any obligation, agreement,
covenant or condition contained in any indenture, mortgage, deed of trust, bank
loan or credit agreement or other evidence of indebtedness, or any lease,
contract or other agreement or instrument to which the Company or its Subsidiary
is a party or by which any of them or any of their properties is bound except
for such breach or default which would not have a Material Adverse Effect; and
the execution, delivery and performance of this Agreement, the issuance and sale
of the Shares and the consummation of the transactions contemplated hereby will
not conflict with, or result in any breach of or constitute a default under (nor
constitute any event which with notice, lapse of time, or both would result in
any breach of, or constitute a default under), any provisions of the charter or
bylaws, of the Company or its Subsidiary or under any provision of any license,
indenture, mortgage, deed of trust, bank loan or credit agreement or other
evidence of indebtedness, or any lease, contract or other agreement or
instrument to which the Company or its Subsidiary is a party or by which any of
them or their respective properties may be bound or affected, or under any
federal, state, local or foreign law, regulation or rule or any decree, judgment
or order applicable to the Company or its Subsidiary;
(g) this Agreement has been duly authorized, executed and delivered by the
Company and is a legal, valid and binding agreement of the Company enforceable
in accordance with its terms;
(h) the capital stock of the Company, including the Shares, conforms in all
material respects to the description thereof contained in the Registration
Statement and Prospectus and the certificates for the Shares are in due and
proper form and the holders of the Shares will not be subject to personal
liability solely by reason of being such holders;
(i) 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;
(j) no approval, authorization, consent or order of or filing with any
national, state or local governmental or regulatory commission, board, body,
authority or agency is required in connection with the issuance and sale of the
Shares or the consummation by the Company of the transactions as contemplated
hereby other than registration of the Shares under the Act and any necessary
qualification under the securities or blue sky laws of the various jurisdictions
in which the Shares are being offered by the Underwriters or under the rules and
regulations of the National Association of Securities Dealers, Inc. (NASD);
(k) no person has the right, contractual or otherwise, to cause the Company to
issue to it, or register pursuant to the Act, any shares of capital stock of the
Company upon the issue and sale of the Shares to the Underwriters hereunder, nor
does any person have preemptive rights, co-sale rights, rights of first
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refusal or other rights to purchase any of the Shares, other than those that
have been expressly waived prior to the date hereof;
(l) Deloitte & Touche LLP, whose report on the consolidated financial
statements of the Company and its Subsidiary is filed with the Commission as
part of the Registration Statement and Prospectus, are independent public
accountants as required by the Act;
(m) each of the Company and its Subsidiary has all necessary licenses,
authorizations, consents and approvals and has made all necessary filings
required under any federal, state, local or foreign law, regulation or rule
except to the extent that the failure to obtain all necessary licenses,
authorizations, consents and approvals or make all necessary filings required
under any state, local or foreign law, regulation or rule would not reasonably
be expected to cause a Material Adverse Effect, other than any such obligations
arising under federal law, and has obtained all necessary authorizations,
consents and approvals from other persons, in order to conduct its respective
business; neither the Company nor its Subsidiary is in violation of, or in
default under, any such license, authorization, consent or approval or any
federal, state, local or foreign law, regulation or rule or any decree, order or
judgment applicable to the Company or its Subsidiary the effect of which could
reasonably be expected to have a Material Adverse Effect;
(n) all legal or governmental proceedings, contracts, leases or documents of a
character required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement have been
so described or filed as required;
(o) other than as described in the Registration Statement, there are no
actions, suits, claims, investigations or proceedings pending or threatened to
which the Company or its Subsidiary or any of their respective officers is a
party or of which any of their respective properties is subject at law or in
equity, or before or by any federal, state, local or foreign governmental or
regulatory commission, board, body, authority or agency which could reasonably
be expected to result in a judgment, decree or order having a Material Adverse
Effect or prevent consummation of the transactions contemplated hereby;
(p) the audited financial statements included in the Registration Statement and
the Prospectus present fairly the consolidated financial position of the Company
and its Subsidiary as of the dates indicated and the consolidated results of
operations and cash flows of the Company and its Subsidiary for the periods
specified; such financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis during
the periods involved;
(q) subsequent to the respective dates as of which information is given in the
Registration Statement and the Prospectus, there has not been (i) any material
adverse change, or any development which is likely to cause a material adverse
change, in the business, prospects or assets described or referred to in the
Registration Statement, or the results of operations, condition (financial or
otherwise), business, prospects or operations of the Company and its Subsidiary
taken as a whole, (ii) any transaction which is material to the Company or its
Subsidiary, taken as a whole, except transactions in the ordinary course of
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business, (iii) any obligation, direct or contingent, which is material to the
Company and its Subsidiary taken as a whole, incurred by the Company or its
Subsidiary, (iv) any change in the capital stock or outstanding indebtedness of
the Company or its Subsidiary except pursuant to compensatory plans or
arrangements in the ordinary course of business or (v) any dividend or
distribution of any kind declared, paid or made on the capital stock of the
Company. Neither the Company nor its Subsidiary has any contingent obligation
material to the Company and the Subsidiary, taken as a whole, which is not
disclosed in the Registration Statement;
(r) the Company has obtained the agreement of each of its directors, officers,
stockholders other than Furukawa Electronics North America ("FENA"), the holder
of all of the Class B Common Stock, and option holders not to offer, sell,
contract to sell, pledge, loan, grant any option to purchase, make any short
sale or otherwise dispose of or grant any rights with respect to any shares of
Class A Common Stock, or any options or warrants to purchase any shares of Class
A Common Stock, or any securities convertible into, exchangeable for or that
represent the right to receive shares of Class A Common Stock, whether now owned
or hereinafter acquired, owned directly by the holder (including holding as a
custodian) or with respect to which the holder has beneficial ownership within
the rules and regulations of the SEC for a period of 180 days after the date of
the Prospectus;
(s) the Company has obtained the agreement of FENA and its affiliates not to
offer, sell, contract to sell, pledge, loan, grant any option to purchase, make
any short sale or otherwise dispose of or grant any rights with respect to any
shares of Common Stock, or any options or warrants to purchase any shares of
Common Stock, or any securities convertible into, exchangeable for or that
represent the right to receive shares of Common Stock, whether now owned or
hereinafter acquired, owned directly by the holder (including holding as a
custodian) or with respect to which the holder has beneficial ownership within
the rules and regulations of the SEC for a period of 180 days after the date of
the Prospectus;
(t) the Company is not and, after giving effect to the offering and sale of the
Shares, will not be an "investment company" or an entity "controlled" by an
"investment company," as such terms are defined in the Investment Company Act of
1940, as amended (the "Investment Company Act");
(u) The Company and the Subsidiary have good and marketable title to all
property (real and personal) described in the Prospectus as being owned by them,
free and clear of all liens, claims, security interests or other encumbrances
except such as are described in the Registration Statement and the Prospectus
and except as would not individually or in the aggregate have a Material Adverse
Effect. To the Company's knowledge, all the property being held under lease by
the Company and the Subsidiary is held thereby under valid, subsisting and
enforceable leases;
(v) Each of the Company and the Subsidiary is insured by insurers of recognized
financial responsibility against such losses and risks and in such amount as are
customary in the business in which it is engaged. All policies of insurance
insuring the Company, the Subsidiary or any of their businesses, material
assets, employees, officers and directors are in full force and effect, and each
of the Company and each Subsidiary is in compliance with the terms of such
policies in all material respects.
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There are no claims by the Company or either Subsidiary under any such policy or
instrument as to which any insurance company is denying liability or defending
under a reservation of rights clause;
(w) All statistical and market-related data included in the Prospectus are
based on or derived from sources that the Company believes to be reliable and
accurate, and the Company has received the written consent to the use of such
data from such sources to the extent required;
(x) Neither the Company nor any of its affiliates has taken, directly or
indirectly, any action designed to or which has constituted or which might
reasonably be expected to cause or result, under the Securities Exchange Act of
1934, as amended, and the rules and regulations thereunder (collectively, the
"Exchange Act"), or otherwise, in stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the Shares;
(y) The Company owns or has obtained licenses (which such licenses are
enforceable against the Company and, to the Company's best knowledge, the other
parties thereto) for the patents, patent applications, inventions, technology,
trademarks, trademark registrations, service marks, service mark registrations,
trade names, copyrights, trade secrets and rights described in the Prospectus as
being owned or used by or licensed to the Company or the Subsidiary or necessary
for the conduct of their respective businesses as currently conducted
(collectively, the "Intellectual Property"). Each employee of the Company has
entered into a confidentiality and invention assignment agreement in favor of
the Company as a condition of his or her employment. Except as set forth in the
Prospectus (i) there are no rights of third parties to any such Intellectual
Property inconsistent with the rights of the Company related to such
Intellectual Property; (ii) to the Company's knowledge there is no infringement
by third parties of any such Intellectual Property owned by the Company; (iii)
there is no pending or, to the Company's best knowledge, threatened action,
suit, proceeding or claim by others challenging the Company's rights in or to
any such Intellectual Property, and the Company is unaware of any facts which
would form a reasonable basis for any such claim; (iv) there is no pending or,
to the Company's best knowledge, threatened action, suit, proceeding or claim by
others challenging the validity or scope of any such Intellectual Property, and
the Company is unaware of any facts which would form a reasonable basis for any
such claim; (v) there is no pending or, to the Company's best knowledge,
threatened action, suit, proceeding or claim by others that the Company or the
Subsidiary infringes or otherwise violates, or would infringe or otherwise
violate upon commercialization of its products and product candidates described
in the Prospectus, any patent, trademark, copyright, trade secret or other
proprietary rights of others, and the Company is unaware of any facts which
would form a reasonable basis for any such claim; and (vi) to the Company's
knowledge there is no patent or patent application which contains claims that
dominate or may dominate any Intellectual Property described in the Prospectus
as being owned by or licensed to the Company or the Subsidiary or that is
necessary for the conduct of their respective businesses as currently or
contemplated to be conducted or that interferes with the issued or pending
claims of any such Intellectual Property;
(z) Neither the Company nor any Subsidiary has violated any foreign, federal,
state or local law or regulation relating to the protection of human health and
safety, the environment or hazardous or toxic
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substances or wastes, pollutants or contaminants, nor any federal or state law
relating to discrimination in the hiring, promotion or pay of employees nor any
applicable federal or state wages and hours laws, nor any provisions of the
Employee Retirement Income Security Act or the rules and regulations promulgated
thereunder, which violation individually or in the aggregate could reasonably be
expected to result in a Material Adverse Effect;
(aa) The Company and the Subsidiary maintain a system of internal accounting
controls sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences;
(bb) Each of the Company and the Subsidiary has filed all federal, state, local
and foreign tax returns and tax forms required to be filed. Such returns and
forms are complete and correct in all material respects, and all taxes shown by
such returns or otherwise assessed that are due or payable have been paid,
except such taxes as are being contested in good faith and as to which adequate
reserves have been provided. All payroll withholdings required to be made by the
Company and the Subsidiary with respect to employees have been made. The
charges, accruals and reserves on the books of the Company and the Subsidiary in
respect of any tax liability for any year not finally determined are, in
management's determination, adequate to meet any assessments or reassessments
for additional taxes. There have been no tax deficiencies asserted and, to the
knowledge of the Company, no tax deficiency might be reasonably asserted or
threatened against the Company or any Subsidiary which individually or in the
aggregate could reasonably be expected to have a Material Adverse Effect; and
(cc) Immediately after the issuance and sale of the Shares to the Underwriters,
no shares of preferred stock of the Company shall be issued and outstanding, and
no holder of any shares of capital stock, securities convertible into or
exchangeable or exercisable for capital stock or options, warrants or other
rights to purchase capital stock or any other securities of the Company shall
have any existing or future right to acquire any shares of preferred stock of
the Company.
In addition, any certificate signed by any executive officer of the Company,
delivered to the Representatives or counsel for the Underwriters in connection
with the offering of the Shares shall be deemed to be a representation and
warranty by the Company, as to matters covered thereby, to each Underwriter.
4. Certain Covenants of the Company. The Company hereby agrees:
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(a) to furnish such information as may be required and otherwise to cooperate
in qualifying the Shares for offering and sale under the securities or blue sky
laws of such states as you may designate and to maintain such qualifications in
effect so long as required for the distribution of the Shares; provided
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that the Company shall not be required to qualify as a foreign corporation or to
consent to the service of process under the laws of any such state (except
service of process with respect to the offering and sale of the Shares); and to
promptly advise you of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Shares for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose;
(b) to make available to the Underwriters in New York City, as soon as
practicable after the Registration Statement becomes effective, and thereafter
from time to time to furnish to the Underwriters, as many copies of the
Prospectus (or of the Prospectus as amended or supplemented if the Company shall
have made any amendments or supplements thereto after the effective date of the
Registration Statement) as the Underwriters may request for the purposes
contemplated by the Act; in case any Underwriter is required to deliver a
prospectus within the nine-month period referred to in Section 10(a)(3) of the
Act in connection with the sale of the Shares, the Company will prepare promptly
upon request such amendment or amendments to the Registration Statement and such
prospectuses as may be necessary to permit compliance with the requirements of
Section 10(a)(3) of the Act;
(c) to advise you promptly and (if requested by you) to confirm such advice in
writing (i) when the Registration Statement has become effective and when any
post-effective amendment thereto becomes effective and (ii) if Rule 430A under
the Act is used, when the Prospectus is filed with the Commission pursuant to
Rule 424(b) under the Act (which the Company agrees to file in a timely manner
under such Rules);
(d) to advise you promptly, confirming such advice in writing, of any request
by the Commission for amendments or supplements to the Registration Statement or
Prospectus or for additional information with respect thereto, or of notice of
institution of proceedings for, or the entry of a stop order suspending the
effectiveness of the Registration Statement and, if the Commission should enter
a stop order suspending the effectiveness of the Registration Statement, to make
every reasonable effort to obtain the lifting or removal of such order as soon
as possible; to advise you promptly of any proposal to amend or supplement the
Registration Statement or Prospectus and to file no such amendment or supplement
to which you shall object in writing;
(e) to file promptly all reports and any definitive proxy or information
statement required to be filed by the Company with the Commission in order to
comply with the Exchange Act subsequent to the date of the Prospectus and for so
long as the delivery of a prospectus is required in connection with the offering
or sale of the shares, and to promptly notify you of such filing;
(f) if necessary or appropriate, to file a registration statement pursuant to
Rule 462(b) under the Act;
(g) to furnish to you and, upon request, to each of the other Underwriters for
a period of five years from the date of this Agreement (i) copies of any reports
or other communications which the Company shall send to its stockholders or
shall from time to time publish or publicly disseminate, (ii) copies of all
annual, quarterly and current reports filed with the Commission on Forms 10-K,
10-Q and 8-K, or such
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other similar form as may be designated by the Commission, (iii) copies of
documents or reports filed with any national securities exchange on which any
class of securities of the Company is listed, and (iv) such other information as
you may reasonably request regarding the Company or its Subsidiary;
(h) to advise the Underwriters promptly of the happening of any event known to
the Company within the time during which a Prospectus relating to the Shares is
required to be delivered under the Act which, in the judgment of the Company,
would require the making of any change in the Prospectus then being used so that
the Prospectus would not include an untrue statement of material fact or omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances under which they are made, not misleading, and, during such
time, to prepare and furnish, at the Company's expense, to the Underwriters
promptly such amendments or supplements to such Prospectus as may be necessary
to reflect any such change and to furnish you a copy of such proposed amendment
or supplement before filing any such amendment or supplement with the
Commission;
(i) to make generally available to its security holders, and to deliver to you,
an earnings statement of the Company (which will satisfy the provisions of
Section 11(a) of the Act) covering a period of twelve months beginning after the
effective date of the Registration Statement (as defined in Rule 158(c) of the
Act) as soon as is reasonably practicable after the termination of such twelve-
month period but not later than __________, 2000;
(j) 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, shareholders' equity and of cash flow of the Company for such fiscal
year), accompanied by a copy of the certificate or report thereon of nationally
recognized independent certified public accountants;
(k) to furnish to you five signed copies of the Registration Statement, as
initially filed with the Commission, and of all amendments thereto (including
all exhibits thereto) and sufficient conformed copies of the foregoing (other
than exhibits) for distribution of a copy to each of the other Underwriters;
(l) to furnish to you as early as practicable prior to the Time of Purchase and
the Additional Time of Purchase, as the case may be, but not later than two
business days prior thereto, a copy of the latest available unaudited interim
consolidated financial statements, if any, of the Company and its Subsidiary
which have been read by the Company's independent certified public accountants,
as stated in their letter to be furnished pursuant to Section 6(c) hereof;
(m) to apply the net proceeds from the sale of the Shares in the manner set
forth under the caption "Use of Proceeds" in the Prospectus;
(n) to pay all costs, expenses, fees and taxes (other than any transfer taxes
and fees and disbursements of counsel for the Underwriters except as set forth
under Section 5 hereof and (iii), (iv) and (vi) below) in connection with (i)
the preparation and filing of the Registration Statement, each Preliminary
Prospectus, the Prospectus, and any amendments or supplements thereto, and the
printing and
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furnishing of copies of each thereof to the Underwriters and to dealers
(including costs of mailing and shipment), (ii) the registration, issue, sale
and delivery of the Shares, (iii) the word processing and/or printing of this
Agreement, any Agreement Among Underwriters, any dealer agreements, any Powers
of Attorney and any closing documents (including compilations thereof) and the
reproduction and/or printing and furnishing of copies of each thereof to the
Underwriters and (except closing documents) to dealers (including costs of
mailing and shipment), (iv) the qualification of the Shares for offering and
sale under state laws and the determination of their eligibility for investment
under state law as aforesaid (including the documented legal fees reasonably
incurred and filing fees and other disbursements of counsel for the
Underwriters) and the printing and furnishing of copies of any blue sky surveys
or legal investment surveys to the Underwriters and to dealers, (v) any listing
of the Shares on any securities exchange or qualification of the Shares for
quotation on the Nasdaq Stock Market and any registration thereof under the
Exchange Act, (vi) any filing for review of the public offering of the Shares by
the NASD and (vii) the performance of the Company's other obligations hereunder;
(o) to furnish to you, before filing with the Commission subsequent to the
effective date of the Registration Statement and during the period referred to
in paragraph (e) above, a copy of any document proposed to be filed pursuant to
Section 13, 14 or 15(d) of the Exchange Act;
(p) not to sell, offer or agree to sell, contract to sell, grant any option to
sell or otherwise dispose of, directly or indirectly, any shares of capital
stock or securities convertible into or exchangeable or exercisable for capital
stock or warrants or other rights to purchase capital stock or any other
securities of the Company that are substantially similar to capital stock or
permit the registration under the Act of any shares of capital stock, except for
the registration of the Shares and the sales to the Underwriters pursuant to
this Agreement, except for the registration on Form S-8 of shares of capital
stock issuable pursuant to the Company's compensatory plans or arrangements, and
except for issuances of Class A Common Stock upon the exercise of outstanding
options, warrants and debentures, for a period of 180 days after the date
hereof, without the prior written consent of UBS Warburg LLC; and
(q) to use its best efforts to cause the Class A Common Stock to be included
for quotation on the Nasdaq National Market.
5. Reimbursement of Underwriters' Expenses. If the Shares are not delivered
---------------------------------------
for any reason, other than the termination of this Agreement pursuant to the
first two paragraphs of Section 7 hereof or the default by one or more of the
Underwriters in its or their respective obligations hereunder, the Company
shall, in addition to paying the amounts described in Section 4(n) hereof,
reimburse the Underwriters for all of their out-of-pocket expenses, including
the documented fees and disbursements of their counsel reasonably incurred.
6. Conditions of Underwriters' Obligations. The several obligations of the
---------------------------------------
Underwriters hereunder are subject to the accuracy of the representations and
warranties on the part of the Company on the date hereof and at the Time of
Purchase (and the several obligations of the Underwriters at the Additional Time
of Purchase are subject to the accuracy of the representations and warranties on
the part of the
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<PAGE>
Company on the date hereof and at the Additional Time of Purchase (unless
previously waived) and at the Additional Time of Purchase, as the case may be),
the performance by the Company of its obligations hereunder and to the following
additional conditions precedent:
(a) The Company shall furnish to you at the Time of Purchase and at the
Additional Time of Purchase, as the case may be, an opinion of Brobeck Phleger &
Harrison LLP, counsel for the Company, addressed to the Underwriters, and dated
the Time of Purchase or the Additional Time of Purchase, as the case may be,
with reproduced copies for each of the other Underwriters and in form set forth
in Annex A attached hereto.
(b) The Company shall furnish to you at the Time of Purchase and at the
Additional Time of Purchase, as the case may be, an opinion of _____________,
special counsel for the Company on certain intellectual property matters,
addressed to the Underwriters, and dated the Time of Purchase or the Additional
Time of Purchase, as the case may be, with reproduced copies for each of the
other Underwriters and in form satisfactory to Wilson Sonsini Goodrich & Rosati,
PC, counsel for the Underwriters, stating that:
(i) As to the statements under the captions "Risk Factors --If we are
unsuccessful in defending against Methode's lawsuit for patent infringement, we
may be required to pay significant monetary damages to Methode and may be
enjoined from manufacturing and selling certain products," and "Business --Legal
Proceedings" nothing has come to the attention of such counsel which caused them
to believe that the above-mentioned sections of the Registration Statement and
any amendment or supplement thereto made available and reviewed by such counsel,
at the time the Registration Statement became effective and at all times
subsequent thereto up to and on the Closing Date and on any later date on which
Option Stock are to be purchased, contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(ii) Except for the claims filed by Methode Electronics, Inc. in October
1999, such counsel knows of no material action, suit, claim or proceeding
relating to patents, patent rights or licenses, trademarks or trademark rights,
copyrights, collaborative research, licenses or royalty arrangements or
agreements or trade secrets, know-how or proprietary techniques, including
processes and substances, owned by or affecting the business or operations of
the Company which are pending or threatened against the Company or any of its
officers or directors.
(c) You shall have received from Deloitte & Touche LLP, letters dated,
respectively, the date of this Agreement and the Time of Purchase and Additional
Time of Purchase, as the case may be, and addressed to the Underwriters (with
reproduced copies for each of the Underwriters) in the forms heretofore approved
by UBS Warburg LLC.
(d) You shall have received at the Time of Purchase and at the Additional Time
of Purchase, as the case may be, the favorable opinion of Wilson Sonsini
Goodrich & Rosati, PC, counsel for the
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Underwriters, dated the Time of Purchase or the Additional Time of Purchase, as
the case may be, as to the matters referred to in subparagraphs (iv), (v),
(viii) (with respect to the Shares only), (ix) and (x) of paragraph (a) of this
Section 6.
In addition, such counsel shall state that such counsel have
participated in conferences with officers and other representatives of the
Company, counsel for the Company, representatives of the independent public
accountants of the Company and representatives of the Underwriters at which
the contents of the Registration Statement and Prospectus and related
matters were discussed and, although such counsel is not passing upon and
does not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement and
Prospectus (except as to matters referred to with respect to the Shares
under subparagraph (viii) of paragraph (a) of this Section 6), on the basis
of the foregoing (relying as to materiality upon the opinions of officers
and other representatives of the Company), no facts have come to the
attention of such counsel which lead them to believe that the Registration
Statement or any amendment thereto at the time such Registration Statement
or amendment became effective contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that the
Prospectus as of its date or any supplement thereto as of its date
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, in the light of the circumstances under which they were
made, not misleading (it being understood that such counsel need express no
comment with respect to the financial statements and schedules and other
financial and statistical data derived therefrom included in the
Registration Statement or Prospectus).
(e) No amendment or supplement to the Registration Statement or Prospectus
shall be filed prior to the time the Registration Statement becomes effective to
which you object in writing.
(f) The Registration Statement shall become effective at or before 5:00 P.M.,
New York City time, on the date of this Agreement, unless a later time (but not
later than 5:00 P.M., New York City time, on the second full business day after
the date of this Agreement) shall be agreed to by the Company and you in writing
or by telephone; provided, however, that the Company and you and any group of
-------- -------
Underwriters, including you, who have agreed hereunder to purchase in the
aggregate at least 50% of the Firm Shares may from time to time agree on a later
date.
(g) Prior to the Time of Purchase or the Additional Time of Purchase, as the
case may be, (i) no stop order with respect to the effectiveness of the
Registration Statement shall have been issued under the Act or proceedings
initiated under Section 8(d) or 8(e) of the Act; (ii) the Registration Statement
and all amendments thereto, or modifications thereof, if any, shall not contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading;
and (iii) the Prospectus and all amendments or supplements thereto, or
modifications thereof, if any, shall not contain an untrue statement of a
material fact or omit to state a
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<PAGE>
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.
(h) Between the time of execution of this Agreement and the Time of Purchase or
the Additional Time of Purchase, as the case may be, (i) no material and
unfavorable change, financial or otherwise (other than with respect to
information set forth or referred to in the Registration Statement and
Prospectus), in the business, condition or prospects of the Company and its
Subsidiary taken as a whole shall occur and (ii) no transaction which is
material and unfavorable to the Company shall have been entered into by the
Company or its Subsidiary.
(i) The Company will, at the Time of Purchase or Additional Time of Purchase,
as the case may be, deliver to you a certificate of two of its executive
officers to the effect that the representations and warranties of the Company as
set forth in this Agreement are true and correct as of each such date, that the
Company shall perform such of its obligations under this Agreement as are to be
performed at or before the Time of Purchase and at or before the Additional Time
of Purchase, as the case may be and the conditions set forth in paragraphs (g)
and (h) of this Section 6 have been met.
(j) You shall have received signed letters, dated the date of this Agreement,
from each of the directors, officers, stockholders other than FENA and its
affiliates and option holders of the Company to the effect that such persons
shall not offer, sell, contract to sell, pledge, loan, grant any option to
purchase, make any short sale or otherwise dispose of or grant any rights with
respect to any shares of Class A Common Stock, or any options or warrants to
purchase any shares of Class A Common Stock, or any securities convertible into,
exchangeable for or that represent the right to receive shares of Class A Common
Stock, whether now owned or hereinafter acquired, owned directly by the holder
(including holding as a custodian) or with respect to which the holder has
beneficial ownership within the rules and regulations of the SEC for a period of
180 days after the date of the Prospectus without the prior written consent of
UBS Warburg LLC.
(k) You shall have obtained a signed letter, dated the date of this Agreement,
from FENA to the effect that it along with its affiliates shall not offer, sell,
contract to sell, pledge, loan, grant any option to purchase, make any short
sale or otherwise dispose of or grant any rights with respect to any shares of
Common Stock, or any options or warrants to purchase any shares of Common Stock,
or any securities convertible into, exchangeable for or that represent the right
to receive shares of Common Stock, whether now owned or hereinafter acquired,
owned directly by the holder (including holding as a custodian) or with respect
to which the holder has beneficial ownership within the rules and regulations of
the SEC for a period of 180 days after the date of the Prospectus;
(l) The Company shall have furnished to you such other documents and
certificates as to the accuracy and completeness of any statement in the
Registration Statement and the Prospectus as of the Time of Purchase and the
Additional Time of Purchase, as the case may be, as you may reasonably request.
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<PAGE>
(m) The Shares shall have been approved for listing for quotation on the Nasdaq
National Market, subject only to notice of issuance at or prior to the Time of
Purchase or the Additional Time of Purchase, as the case may be.
(n) Between the time of execution of this Agreement and the Time of Purchase or
Additional Time of Purchase, as the case may be, there shall not have occurred
any downgrading, nor shall any notice or announcement have been given or made of
(i) any intended or potential downgrading or (ii) any review or possible change
that does not indicate an improvement, in the rating accorded any securities of
or guaranteed by the Company or its Subsidiary by any "nationally recognized
statistical rating organization," as that term is defined in Rule 436(g)(2)
under the Act.
(o) If the Registration Statement shall become effective pursuant to Rule 430A
under the Act, the Prospectus shall have been filed with the Commission in
accordance with the timing requirements of Rule 424(b) under the Act.
7. Effective Date of Agreement; Termination. This Agreement shall become
----------------------------------------
effective (i) if Rule 430A under the Act is not used, when you shall have
received notification of the effectiveness of the Registration Statement, or
(ii) if Rule 430A under the Act is used, when the parties hereto have executed
and delivered this Agreement.
The obligations of the several Underwriters hereunder shall be subject
to termination in the absolute discretion of you or any group of Underwriters
(which may include you) which has agreed to purchase in the aggregate at least
50% of the Firm Shares, if, since the time of execution of this Agreement or the
respective dates as of which information is given in the Registration Statement
and Prospectus, (i) there has been any material adverse and unfavorable change,
financial or otherwise (other than as referred to in the Registration Statement
and Prospectus), in the operations, business, condition or prospects of the
Company and its Subsidiary taken as a whole, which would, in your judgment or in
the judgment of such group of Underwriters, make it impracticable to market the
Shares; or (ii) there shall have occurred any downgrading, or any notice shall
have been given of (x) any intended or potential downgrading or (y) any review
or possible change that does not indicate an improvement, in the rating accorded
any securities of or guaranteed by the Company or its Subsidiary by any
"nationally recognized statistical rating organization", as that term is defined
in Rule 436(g)(2) under the Act; or (iii) if, at any time prior to the Time of
Purchase or, with respect to the purchase of any Additional Shares, the
Additional Time of Purchase, as the case may be, trading in securities on the
New York Stock Exchange, the American Stock Exchange or the Nasdaq Stock Market
shall have been suspended or limitations or minimum prices shall have been
established on the New York Stock Exchange, the American Stock Exchange or the
Nasdaq Stock Market, or if a banking moratorium shall have been declared either
by the United States or New York State authorities; or (iv) if the United States
shall have declared war in accordance with its constitutional processes or there
shall have occurred any material outbreak or escalation of hostilities or other
national or international calamity or crisis of such magnitude in its effect on
the financial markets of the United States as, in your judgment or in the
judgment of such group of Underwriters, to make it impracticable to market the
Shares.
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<PAGE>
If you or any group of Underwriters elects to terminate this Agreement
as provided in this Section 7, the Company and each other Underwriter shall be
notified promptly by letter or facsimile.
If the sale to the Underwriters of the Shares, as contemplated by this
Agreement, is not carried out by the Underwriters for any reason permitted under
this Agreement or if such sale is not carried out because the Company shall be
unable to comply with any of the terms of this Agreement, the Company shall not
be under any obligation or liability under this Agreement (except to the extent
provided in Sections 4(n), 5 and 9 hereof), and the Underwriters shall be under
no obligation or liability to the Company under this Agreement (except to the
extent provided in Section 9 hereof) or to one another hereunder.
8. Increase in Underwriters' Commitments. Subject to Sections 6 and 7, if any
-------------------------------------
Underwriter shall default in its obligation to take up and pay for the Firm
Shares to be purchased by it hereunder (otherwise than for a reason sufficient
to justify the termination of this Agreement under the provisions of Section 7
hereof) and if the number of Firm Shares which all Underwriters so defaulting
shall have agreed but failed to take up and pay for does not exceed 10% of the
total number of Firm Shares, the non-defaulting Underwriters shall take up and
pay for (in addition to the aggregate number of Firm Shares they are obligated
to purchase pursuant to Section 1 hereof) the number of Firm Shares agreed to be
purchased by all such defaulting Underwriters, as hereinafter provided. Such
Shares shall be taken up and paid for by such non-defaulting Underwriter or
Underwriters in such amount or amounts as you may designate with the consent of
each Underwriter so designated or, in the event no such designation is made,
such Shares shall be taken up and paid for by all non-defaulting Underwriters
pro rata in proportion to the aggregate number of Firm Shares set opposite the
names of such non-defaulting Underwriters in Schedule A.
Without relieving any defaulting Underwriter from its obligations
hereunder, the Company agrees with the non-defaulting Underwriters that it will
not sell any Firm Shares hereunder unless all of the Firm Shares are purchased
by the Underwriters (or by substituted Underwriters selected by you with the
approval of the Company or selected by the Company with your approval).
If a new Underwriter or Underwriters are substituted by the
Underwriters or by the Company for a defaulting Underwriter or Underwriters in
accordance with the foregoing provision, the Company or you shall have the right
to postpone the Time of Purchase for a period not exceeding five business days
in order that any necessary changes in the Registration Statement and Prospectus
and other documents may be effected.
The term Underwriter as used in this Agreement shall refer to and
include any Underwriter substituted under this Section 8 with like effect as if
such substituted Underwriter had originally been named in Schedule A.
If the aggregate number of Shares which the defaulting Underwriter or
Underwriters agreed to purchase exceeds 10% of the total number of Shares which
all Underwriters agreed to
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purchase hereunder, and if neither the non-defaulting Underwriters nor the
Company shall make arrangements within the five business day period stated above
for the purchase of all the Shares which the defaulting Underwriter or
Underwriters agreed to purchase hereunder, this Agreement shall be terminated
without further act or deed and without any liability on the part of the Company
to any non-defaulting Underwriter and without any liability on the part of any
non-defaulting Underwriter to the Company. Nothing in this paragraph, and no
action taken hereunder, shall relieve any defaulting Underwriter from liability
in respect of any default of such Underwriter under this Agreement.
9. Indemnity and Contribution.
--------------------------
(a) The Company agrees to indemnify, defend and hold harmless each
Underwriter, its members, directors and officers, and any person who controls
any Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, and the successors and assigns of all of the foregoing persons
from and against any loss, damage, expense, liability or claim (including the
reasonable cost of investigation) which, jointly or severally, any such
Underwriter or any such person may incur under the Act, the Exchange Act, the
common law or otherwise, insofar as such loss, damage, expense, liability or
claim arises out of or is based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or in the
Registration Statement as amended by any post-effective amendment thereof by the
Company) or in a Prospectus (the term Prospectus for the purpose of this Section
9 being deemed to include any Preliminary Prospectus, the Prospectus and the
Prospectus as amended or supplemented by the Company), or arises out of or is
based upon any omission or alleged omission to state a material fact required to
be stated in either such Registration Statement or Prospectus or necessary to
make the statements made therein, in the light of the circumstances under which
they were made, not misleading, except insofar as any such loss, damage,
expense, liability or claim arises out of or is based upon any untrue statement
or alleged untrue statement of a material fact contained in and in conformity
with information furnished in writing by or on behalf of any Underwriter through
you to the Company expressly for use with reference to such Underwriter in such
Registration Statement or such Prospectus or arises out of or is based upon any
omission or alleged omission to state a material fact in connection with such
information required to be stated in such Registration Statement or such
Prospectus or necessary to make such information not misleading.
If any action, suit or proceeding (together, a "Proceeding") is
brought against an Underwriter or any such person in respect of which indemnity
may be sought against the Company pursuant to the foregoing paragraph, such
Underwriter or such person shall promptly notify the Company in writing of the
institution of such Proceeding and the Company shall assume the defense of such
Proceeding, including the employment of counsel reasonably satisfactory to such
indemnified party and payment of all fees and expenses; provided, however, that
-------- -------
the omission to so notify the Company shall not relieve the Company from any
liability which the Company may have to any Underwriter or any such person or
otherwise. Such Underwriter or such person shall have the right to employ its
or their own counsel in any such case, but the fees and expenses of such counsel
shall be at the expense of such Underwriter or of such person unless the
employment of such counsel shall have been authorized in writing by the Company
in connection with the defense of such Proceeding or the Company shall not
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have, within a reasonable period of time in the light of the circumstances,
employed counsel to have charge of the defense of such Proceeding or such
indemnified party or parties shall have reasonably concluded that there may be
defenses available to it or them which are different from, additional to or in
conflict with those available to the Company (in which case the Company shall
not have the right to direct the defense of such Proceeding on behalf of the
indemnified party or parties), in any of which events such fees and expenses
shall be borne by the Company and paid as incurred (it being understood,
however, that the Company shall not be liable for the expenses of more than one
separate counsel (in addition to any local counsel) in any one Proceeding or
series of related Proceedings in the same jurisdiction representing the
indemnified parties who are parties to such Proceeding). The Company shall not
be liable for any settlement of any Proceeding effected without its written
consent but if settled with the written consent of the Company, the Company
agrees to indemnify and hold harmless any Underwriter and any such person from
and against any loss or liability by reason of such settlement. Notwithstanding
the foregoing sentence, if at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel as contemplated by the second sentence of this paragraph, then the
indemnifying party agrees that it shall be liable for any settlement of any
Proceeding effected without its written consent if (i) such settlement is
entered into more than 60 business days after receipt by such indemnifying party
of the aforesaid request, (ii) such indemnifying party shall not have reimbursed
the indemnified party in accordance with such request prior to the date of such
settlement and (iii) such indemnified party shall have given the indemnifying
party at least 30 days' prior notice of its intention to settle. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened Proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such Proceeding and does not include an admission
of fault, capability or a failure to act, by or on behalf of such indemnified
party.
(b) Each Underwriter severally agrees to indemnify, defend and hold
harmless the Company, its directors and officers, and any person who controls
the Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, and the successors and assigns of all of the foregoing persons
from and against any loss, damage, expense, liability or claim (including the
reasonable cost of investigation) which, jointly or severally, the Company or
any such person may incur under the Act, the Exchange Act, the common law or
otherwise, insofar as such loss, damage, expense, liability or claim arises out
of or is based upon any untrue statement or alleged untrue statement of a
material fact contained in and in conformity with information furnished in
writing by or on behalf of such Underwriter through you to the Company expressly
for use with reference to such Underwriter in the Registration Statement (or in
the Registration Statement as amended by any post-effective amendment thereof by
the Company) or in a Prospectus, or arises out of or is based upon any omission
or alleged omission to state a material fact in connection with such information
required to be stated in such Registration Statement or such Prospectus or
necessary to make such information not misleading.
If any Proceeding is brought against the Company or any such person in
respect of which indemnity may be sought against any Underwriter pursuant to the
foregoing paragraph, the
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Company or such person shall promptly notify such Underwriter in writing of the
institution of such Proceeding and such Underwriter shall assume the defense of
such Proceeding, including the employment of counsel reasonably satisfactory to
such indemnified party and payment of all fees and expenses; provided, however,
-------- -------
that the omission to so notify such Underwriter shall not relieve such
Underwriter from any liability which such Underwriter may have to the Company or
any such person or otherwise. The Company or such person shall have the right to
employ its own counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of the Company or such person unless the
employment of such counsel shall have been authorized in writing by such
Underwriter in connection with the defense of such Proceeding or such
Underwriter shall not have, within a reasonable period of time in the light of
the circumstances, employed counsel to have charge of the defense of such
Proceeding or such indemnified party or parties shall have reasonably concluded
that there may be defenses available to it or them which are different from or
additional to or in conflict with those available to such Underwriter (in which
case such Underwriter shall not have the right to direct the defense of such
Proceeding on behalf of the indemnified party or parties, but such Underwriter
may employ counsel and participate in the defense thereof but the fees and
expenses of such counsel shall be at the expense of such Underwriter), in any of
which events such fees and expenses shall be borne by such Underwriter and paid
as incurred (it being understood, however, that such Underwriter shall not be
liable for the expenses of more than one separate counsel (in addition to any
local counsel) in any one Proceeding or series of related Proceedings in the
same jurisdiction representing the indemnified parties who are parties to such
Proceeding). No Underwriter shall be liable for any settlement of any such
Proceeding effected without the written consent of such Underwriter but if
settled with the written consent of such Underwriter, such Underwriter agrees to
indemnify and hold harmless the Company and any such person from and against any
loss or liability by reason of such settlement. Notwithstanding the foregoing
sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by the second sentence of this paragraph, then the
indemnifying party agrees that it shall be liable for any settlement of any
Proceeding effected without its written consent if (i) such settlement is
entered into more than 60 business days after receipt by such indemnifying party
of the aforesaid request, (ii) such indemnifying party shall not have reimbursed
the indemnified party in accordance with such request prior to the date of such
settlement and (iii) such indemnified party shall have given the indemnifying
party at least 30 days' prior notice of its intention to settle. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened Proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such Proceeding.
(c) If the indemnification provided for in this Section 9 is
unavailable to an indemnified party under subsections (a) and (b) of this
Section 9 in respect of any losses, damages, expenses, liabilities or claims
referred to therein, then each applicable indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, damages, expenses,
liabilities or claims (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the
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Underwriters on the other hand from the offering of the Shares or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and of the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, damages, expenses,
liabilities or claims, 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 respective
proportions as the total proceeds from the offering (net of underwriting
discounts and commissions but before deducting expenses) received by the Company
and the total underwriting discounts and commissions received by the
Underwriters, bear to the aggregate public offering price of the Shares. The
relative fault of the Company on the one hand and of the Underwriters on the
other shall be determined by reference to, among other things, whether the
untrue statement or alleged untrue statement of a material fact or omission or
alleged omission relates to information supplied by the Company or by the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The amount
paid or payable by a party as a result of the losses, damages, expenses,
liabilities and claims referred to in this subsection shall be deemed to include
any legal or other fees or expenses reasonably incurred by such party in
connection with investigating, preparing to defend or defending any Proceeding.
(d) The Company and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 9 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in subsection (c) above. Notwithstanding
the provisions of this Section 9, 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 such Underwriter and distributed to the public were offered to
the public exceeds the amount of any damage which such Underwriter has otherwise
been required to pay by reason of such untrue statement 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 Underwriters' obligations to contribute pursuant to this
Section 9 are several in proportion to their respective underwriting commitments
and not joint.
(e) The indemnity and contribution agreements contained in this
Section 9 and the covenants, warranties and representations of the Company
contained in this Agreement shall remain in full force and effect regardless of
any investigation made by or on behalf of any Underwriter, its partners,
directors or officers or any person (including each partner, officer or director
of such person) who controls any Underwriter within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act, or by or on behalf of the Company,
its directors or officers or any person who controls the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, and shall
survive any termination of this Agreement or the issuance and delivery of the
Shares. The Company and each Underwriter agree promptly to notify each other of
the commencement of any Proceeding against it and, in the case of the Company,
against any of the Company's officers or directors in connection with the
issuance and sale of the Shares, or in connection with the Registration
Statement or Prospectus.
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<PAGE>
10. Notices. Except as otherwise herein provided, all statements, requests,
-------
notices and agreements shall be in writing or by telegram and, if to the
Underwriters, shall be sufficient in all respects if delivered or sent to UBS
Warburg LLC, 299 Park Avenue, New York, N.Y. 10171-0026, Attention: Syndicate
Department and, if to the Company, shall be sufficient in all respects if
delivered or sent to the Company at the offices of the Company at 20961 Knapp
Street, Chatsworth, CA 91311, Attention: Chief Executive Officer.
11. Governing Law; Construction. This Agreement and any claim, counterclaim or
---------------------------
dispute of any kind or nature whatsoever arising out of or in any way relating
to this Agreement ("Claim"), directly or indirectly, shall be governed by, and
construed in accordance with, the laws of the State of New York. The Section
headings in this Agreement have been inserted as a matter of convenience of
reference and are not a part of this Agreement.
12. Directed Share Program. It is understood that approximately 180,000 Shares
-----------------------
("Directed Shares") will initially be reserved by the Underwriters for offer and
sale upon the terms and conditions set forth in the Prospectus and in accordance
with the rules and regulations of the NASD (the "Directed Share Program") to
directors, officers, employees, business associates and related persons of the
Company ("Participants") who have heretofore delivered to you offers to purchase
Shares in form reasonably satisfactory to you, and that any allocation of such
Shares among such persons will be made in accordance with timely directions
received by you from the Company. Except as set forth below, under no
circumstances will any Underwriter be liable to the Company or to any
Participant for any action taken or omitted to be taken in good faith in
connection with such Directed Share Program. It is further understood that to
the extent that any Directed Shares are not affirmatively reconfirmed for
purchase by any Participant on or immediately after the date of this Agreement,
such Directed Shares may be offered to the public as part of the public offering
contemplated hereby. The Company agrees to pay all documented costs and expenses
of the Underwriters reasonably incurred (including the fees and disbursements of
counsel to the Underwriters) solely to the extent such costs and expenses are
incident to the offer and sale of shares of the Stock by the Underwriters
pursuant to the Directed Share Program.
(a) The Company agrees to indemnify and hold harmless the Underwriters and each
person, if any, who controls each Underwriter within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act (herein
called the "Underwriting Entities"), from and against any and all losses,
claims, damages or liabilities (i) caused by any untrue statement or alleged
untrue statement of a material fact contained in any material prepared by or
with the consent of the Company for distribution to Participants in connection
with the Directed Share Program, or caused by any omission or alleged omission
to state therein 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; (ii) caused by the failure of any Participant to pay
for and accept delivery of Directed Shares that the Participant has agreed to
purchase and (A) which immediately following the effectiveness of the
Registration Statement, were subject to a properly confirmed agreement to
purchase from UBS Warburg LLC and (B) UBS Warburg LLC in good faith offered and
was unable to sell such Directed Shares to the public in the offering of Firm
Stock after reasonable efforts to sell such Shares; or (iii), except as
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<PAGE>
specifically provided in the immediately preceding clause (ii), related to,
arising out of, or in connection with the Directed Share Program, including
those arising out of any violation or alleged violation of the Act or out of any
rescission right of any person in respect thereof, other than losses, claims,
damages or liabilities (or expenses relating thereto) that are finally
judicially determined to have resulted from the bad faith or gross negligence of
the Underwriting Entities.
(b) Upon the service of a summons or other initial legal process upon any
Underwriting Entity in any action or suit instituted against it or upon its
receipt of written notification of the commencement of any investigation or
inquiry of, or proceeding against, it in respect of which indemnity may be
sought pursuant to Section 12(a), the Underwriting Entity seeking indemnity will
promptly give Notice of such service or notification to the Company. No
indemnification provided for in Section 12(a) shall be available to any
Underwriting Entity who shall fail promptly so to give the Notice to the Company
to the extent the Company was unaware of the action, suit, investigation,
inquiry or proceeding to which the Notice would have related and was prejudiced
by the failure to give the Notice, but the omission so to notify the Company of
any such service or notification shall not relieve the Company from any
liability which it may have to any such Underwriting Entity for contribution or
otherwise than on account of such indemnity agreement in Section 12(a) (except
as specifically provided in paragraph (c) of this Section 12). Any Underwriting
Entity shall be entitled at its own expense to participate in the defense of any
action, suit or proceeding against, or investigation or inquiry of, such
Underwriting Entity. The Company shall be entitled, if it so elects within a
reasonable time after receipt of the Notice by giving a Notice of Defense to any
such Underwriting Entity, to assume the entire defense of such action, suit,
investigation, inquiry or proceeding, in which event such defense shall be
conducted, at the expense of the Company, by counsel chosen by the Company and
reasonably satisfactory to such Underwriting Entity; provided, however, that (i)
if any such Underwriting Entity reasonably determines that there may be a
conflict between the positions of the Company and of any such Underwriting
Entity in conducting the defense of such action, suit, investigation, inquiry or
proceeding or that there may be legal defenses available to such Underwriting
Entity different from or in addition to those available to the Company, then
counsel for such Underwriting Entity shall be entitled to conduct the defense to
the extent reasonably determined by such counsel to be necessary to protect the
interests of such Underwriting Entity and (ii) in any event, the Underwriting
Entity shall be entitled to have counsel chosen by such Underwriting Entity to
participate in, but not conduct, the defense. It is understood that the Company
shall not, in respect of the legal expense of any such Underwriting Entity in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such Underwriting Entities and that all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by UBS Warburg LLC. If, within a reasonable time after
receipt of the Notice, the Company gives a Notice of Defense in connection with
this Section 12 and the counsel chosen by the Company is reasonably satisfactory
to the Underwriting Entity, the Company will not be liable under this Section 12
for any legal or other expenses subsequently incurred by any such Underwriting
Entity in connection with the defense of the action, suit, investigation,
inquiry or proceeding, except that (A) the Company shall bear the legal and
other expenses incurred in connection with the conduct of the defense as
referred to in clause (i) of the proviso to the preceding sentence and (B) the
Company shall bear such other expenses as it or they have authorized to be
incurred by any such
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<PAGE>
Underwriting Entity. If, within a reasonable time after receipt of the Notice,
no Notice of Defense has been given, the Company shall be responsible for any
legal or other expenses incurred by any such Underwriting Entity in connection
with the defense of the action, suit or proceeding.
(c) If the indemnification provided for in Section 12(a) is unavailable or
insufficient to hold harmless an Underwriting Entity under Section 12(a), then
the Company, in lieu of indemnifying the Underwriting Entity, shall contribute
to the amount paid or payable by the Underwriting Entity as a result of the
losses, claims, damages or liabilities referred to in Section 12(a): (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriting Entities on the other hand from the
offering of the Directed Shares or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company on the one hand and of the Underwriting
Entities on the other hand in connection with the 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 on the one hand and of the Underwriting
Entities on the other hand in connection with the offering of the Directed
Shares shall be deemed to be in the same respective proportions as the total net
proceeds from the offering of the Directed Shares (before deducting expenses)
and the total underwriting discounts and commissions received by the
Underwriting Entities for the Directed Shares, bear to the aggregate public
offering price of the Directed Shares. Relative fault of the Company on the one
hand and the Underwriting Entities on the other hand shall be determined by
reference to, among other things, whether the statement, act or omission that
results in losses, claims, damages or liabilities relates to statements, acts or
omissions by the Company or by the Underwriting Entities and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statements, acts or omissions.
(d) The Company and the Underwriting Entities agree that it would not be just
and equitable if contributions pursuant to Section 12(c) were determined by pro
rata allocation (even if the Underwriting Entities were treated as one entity
for such purpose) or by any other method of allocation which does not take into
account the equitable considerations referred to in Section 12(c). The amount
paid by the Underwriting Entities as a result of the losses, claims, damages or
liabilities, or actions in respect thereof, referred to in Section 12(c) shall
be deemed to include any legal or other expenses reasonably incurred by the
Underwriting Entities in connection with the investigating, preparing to defend
or defending against any action or claim which is the subject of Section 12(c).
Notwithstanding the provisions of this Section 12, no Underwriting Entity shall
be required to contribute pursuant to this Section 12 any amount in excess of
the underwriting discount applicable to the Directed Shares distributed to the
public. No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. Each party
entitled to contribution agrees that upon the service of a summons or other
initial legal process upon it in any action instituted against it in respect of
which contribution may be sought, it will promptly give written notice of such
service to the party or parties from whom contribution may be sought, but the
failure to so notify such party or parties from whom contribution may be sought
shall not relieve such party or parties from any liability hereunder except to
the extent it is, or they are, materially
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<PAGE>
prejudiced as a result thereof and in any event shall not relieve it or them
from any other liability which it or they may have otherwise than on account of
this section.
(e) The indemnity and contribution provisions contained in this Section 12
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
any Underwriting Entity or the Company, its officers or directors or any person
controlling the Company and (iii) except for Section 12(a)(ii), acceptance of
and payment for any of the Directed Shares.
13. Submission to Jurisdiction. Except as set forth below, no Claim may be
--------------------------
commenced, prosecuted or continued in any court other than the courts of the
State of New York located in the City and County of New York or in the United
States District Court for the Southern District of New York, which courts shall
have jurisdiction over the adjudication of such matters, and the Company
consents to the jurisdiction of such courts and personal service with respect
thereto. The Company hereby consents to personal jurisdiction, service and
venue in any court in which any Claim arising out of or in any way relating to
this Agreement is brought by any third party against UBS Warburg LLC or any
indemnified party. Each of UBS Warburg LLC and the Company (on its behalf and,
to the extent permitted by applicable law, on behalf of its stockholders and
affiliates) waives all right to trial by jury in any action, proceeding or
counterclaim (whether based upon contract, tort or otherwise) in any way arising
out of or relating to this Agreement. The Company agrees that a final judgment
in any such action, proceeding or counterclaim brought in any such court shall
be conclusive and binding upon the Company and may be enforced in any other
courts in the jurisdiction of which the Company is or may be subject, by suit
upon such judgment.
14. Parties at Interest. The Agreement herein set forth has been and is made
-------------------
solely for the benefit of the Underwriters and the Company and to the extent
provided in Section 9 hereof the controlling persons, directors and officers
referred to in such section, and their respective successors, assigns, heirs,
personal representatives and executors and administrators. No other person,
partnership, association or corporation (including a purchaser, as such
purchaser, from any of the Underwriters) shall acquire or have any right under
or by virtue of this Agreement.
15. Counterparts. This Agreement may be signed by the parties in one or more
------------
counterparts which together shall constitute one and the same agreement among
the parties.
16. Successors and Assigns. This Agreement shall be binding upon the
----------------------
Underwriters and the Company and their successors and assigns and any successor
or assign of any substantial portion of the Company's and any of the
Underwriters' respective businesses and/or assets.
17. Miscellaneous. UBS Warburg LLC, an indirect, wholly owned subsidiary of
-------------
UBS AG, is not a bank and is separate from any affiliated bank, including any
U.S. branch or agency of UBS AG. Because UBS Warburg LLC is a separately
organized entity, it is solely responsible for its own contractual obligations
and commitments, including obligations with respect to sales and purchases of
securities. Securities sold, offered or recommended by UBS Warburg LLC are not
deposits, are not insured by the Federal Deposit Insurance Corporation, are not
guaranteed by a branch or agency, and are not otherwise an obligation or
responsibility of a branch or agency.
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<PAGE>
If the foregoing correctly sets forth the understanding among the
Company and the Underwriters, please so indicate in the space provided below for
the purpose, whereupon this letter and your acceptance shall constitute a
binding agreement among the Company and the Underwriters, severally.
Very truly yours,
OPTICAL COMMUNICATION PRODUCTS, INC.
By:
---------------------------------
Title: Chief Executive Officer
Accepted and agreed to as of the
date first above written, on
behalf of themselves
and the other several Underwriters
named in Schedule A
UBS WARBURG LLC
J.P. MORGAN SECURITIES, INC.
U.S. BANCORP PIPER JAFFRAY
WIT SOUNDVIEW CORPORATION
By: UBS WARBURG LLC
By: __________________________
Title:
By: __________________________
Title:
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<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
<S> <C>
Number of
Underwriter Firm Shares
----------- -----------
UBS Warburg LLC
J.P. Morgan Securities, Inc.
U.S. Bancorp Piper Jaffray
Wit SoundView Corporation
--------------
Total.......................
==============
</TABLE>
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