<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 19, 1996
REGISTRATION NO. 333-10569
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 4
TO
FORM S-1
REGISTRATION STATEMENT
------------------------
SUPERCONDUCTOR TECHNOLOGIES INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 3679 77-0158076
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
</TABLE>
460 WARD DRIVE, SUITE F
SANTA BARBARA, CA 93111-2310
(805) 683-7646
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
DANIEL C. HU
PRESIDENT AND CHIEF EXECUTIVE OFFICER
SUPERCONDUCTOR TECHNOLOGIES INC.
460 WARD DRIVE, SUITE F
SANTA BARBARA, CA 93111-2310
(805) 683-7646
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------------
COPIES TO:
<TABLE>
<S> <C>
JOHN V. ROOS, ESQ. CARLOS A. FIERRO, ESQ.
KATHLEEN B. BLOCH, ESQ. BAKER & BOTTS, L.L.P.
TAMARA G. MATTISON, ESQ. 2001 ROSS AVENUE
WILSON SONSINI GOODRICH & ROSATI, P.C. DALLAS, TX 75201
650 PAGE MILL ROAD (214) 953-6500
PALO ALTO, CA 94304
(415) 493-9300
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box: [ ]
- ---------------
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
- ---------------
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
- ---------------
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE> 2
EXPLANATORY NOTE
This Amendment No. 4 to the Registration Statement is being filed solely
for the purpose of filing Exhibit 1.1.
<PAGE> 3
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses, other than
underwriting discount, payable by the Registrant in connection with the sale of
Common Stock being registered. All amounts are estimates except the SEC
registration fee and the NASD filing fee.
<TABLE>
<CAPTION>
AMOUNT
TO BE
PAID
--------
<S> <C>
SEC registration fee...................................................... $ 5,899
NASD filing fee........................................................... 2,211
Nasdaq additional listing application fee................................. 17,500
Printing and engraving expenses........................................... 70,000
Legal fees and expenses................................................... 150,000
Accounting fees and expenses.............................................. 50,000
Blue Sky qualification fees and expenses.................................. 10,000
Transfer agent and registrar fees......................................... 25,000
Non-accountable underwriting expense allowance............................ 150,000
Miscellaneous fees........................................................ 19,390
--------
Total........................................................... $500,000
========
</TABLE>
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law authorizes a court to
award, or a corporation's Board of Directors to grant, indemnity to directors
and officers in terms sufficiently broad to permit such indemnification under
certain circumstances for liabilities (including reimbursement for expenses
incurred) arising under the Securities Act of 1933, as amended (the "Act").
Article 10 of the Registrant's Certificate of Incorporation, Article 10 of the
Registrant's Restated Certificate of Incorporation and Article VI of the
Registrant's Bylaws provide for indemnification of its directors, officers,
employees and other agents to the maximum extent permitted by the Delaware
General Corporation Law. In addition, the Registrant has entered into
Indemnification Agreements with its officers and directors. Reference is also
made to Section 8 of the Underwriting Agreement contained in Exhibit 1.1 hereto,
which provides for the indemnification of officers, directors and controlling
persons of the Registrant against certain liabilities.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
Since August 1, 1993, the Registrant has issued and sold the following
unregistered securities:
(1) In March 1996, the Registrant issued 481 shares of Common Stock to
Western Technology Investments pursuant to the exercise of warrants
dated June 12, 1990 and May 17, 1991 at an exercise price of $7.00
per share.
(2) In May 1996, the Registrant issued 866 shares of Common Stock to
Silicon Valley Bancshares pursuant to the exercise of a warrant
dated May 17, 1991 at an exercise price of $7.00 per share.
The issuances of the securities described above were deemed to be exempt
from registration under the Securities Act in reliance on Section 4(2) of such
Act as transactions by an issuer not involving any public offering. In addition,
the recipients of securities in each such transaction represented their
intentions to acquire the securities for investment only and not with a view to
or for sale in connection with any distribution thereof and appropriate legends
were affixed to the share certificates issued in such transactions. All
recipients had adequate access, through their relationships with the Registrant,
to information about the Registrant.
II-1
<PAGE> 4
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF DOCUMENT
- ----------- ---------------------------------------------------------------------------------
<C> <S>
1.1 Form of Underwriting Agreement.
(b)3.1 Amended and Restated Certificate of Incorporation of Registrant.
**3.2 Amended and Restated Bylaws of Registrant.
(a)4.1 Form of Registrant's Common Stock Certificate.
**4.2 Form of Underwriter's Warrant.
**5.1 Opinion of Wilson Sonsini Goodrich & Rosati regarding legality of the securities
being issued.
(a)*10.1 Technology Agreement between the Registrant and Lockheed Corporation dated
January 8, 1988.
(a)10.2 Technical Information Exchange Agreement between the Registrant and Philips dated
September 1989.
(a)10.3 Standard Industrial Lease between the Registrant and UML Real Estate Partnership
dated January 1, 1990; Sublease between Registrant and Consolidated Packaging
Machinery Company dba Industrial Automation Corporation dated October 25, 1989.
(a)10.4 Form of Consulting Agreement.
(a)10.5 Form of Employee Proprietary Information Agreement.
(a)10.6 Offer of Employment Letter to William D. Baker dated December 21, 1991.
(a)10.7 Offer of Employment Letter to Gregory L. Hey-Shipton dated May 7, 1991, as
amended.
(a)10.8 1992 Director Option Plan.
(a)10.9 Form of Indemnification Agreement.
(a)10.10 License Agreement between the Registrant and the University of Arkansas dated
April 9, 1992, as amended.
(a)10.11 Loan and Security Agreement between the Registrant and Silicon Valley Bank dated
May 17, 1991, as amended.
(a)10.12 1992 Stock Option Plan.
(a)10.13 Proprietary Information & Patents Inventions Agreement among the Registrant,
E-Systems, Inc. and various other parties; Purchase Order dated October 10, 1991.
(a)*10.14 Joint Venture Company (JVC) Agreement between the Registrant and Sunpower
Incorporated dated April 2, 1992.
(a)10.15 Government Contract issued to Registrant by the Defense Advanced Research
Projects Agency through the Office of Naval Research dated September 4, 1991.
(a)10.16 Offer of Employment Letter to Daniel Hu dated November 23, 1992.
(b)*10.17 License Agreement between the Registrant and E.I. DuPont de Nemours and Company
dated December 1992.
(a)10.18 Note and Warrant Purchase Agreement dated December 28, 1992.
(b)10.19 Form of Representative's Warrant Agreement.
(c)*10.20 Superconductor Technologies Inc. Purchase Agreement.
(d)10.21 Loan and Security Agreement between Registrant and Silicon Valley Bank dated
August 26, 1994.
(d)10.22 Form of Distribution Agreement.
(d)10.23 Amended and Restated 1988 Stock Option Plan, as amended, with form of stock
option agreement.
(e)10.24 Amendment to Loan and Security Agreement between Registrant and Silicon Valley
Bank dated June 27, 1995.
**+10.25 Joint Venture Agreement between the Registrant and Alantac Technologies (S) Pte
Ltd., dated May 20, 1996.
**23.1 Consent of Wilson Sonsini Goodrich & Rosati (included in Exhibit 5.1).
**23.2 Consent of Price Waterhouse LLP (see page II-6).
**24.1 Power of Attorney (See page II-5).
</TABLE>
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(a) Incorporated by reference from the Registrant's Registration Statement on
Form S-1 (Reg. No. 33-56714).
II-2
<PAGE> 5
(b) Incorporated by reference from Amendment No. 1 to the Registrant's
Registration Statement on Form S-1 (Reg. No. 33-56714).
(c) Incorporated by reference from the Registrant's Annual Report on Form 10-K
filed for the fiscal year ended December 31, 1993.
(d) Incorporated by reference from the Registrant's Annual Report on Form 10-K
filed for the fiscal year ended December 31, 1994.
(e) Incorporated by reference from the Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31, 1995.
* Confidential treatment has been previously granted for certain portions of
these exhibits.
** Previously filed.
+ Confidential treatment has been requested.
(b) Financial Statement Schedule
Not Applicable
Schedules not listed above have been omitted because the information
required to be set forth therein is not applicable or is shown in the financial
statements or notes thereto.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes to provide to the Underwriter
at the closing specified in the Underwriting Agreement, certificates in such
denominations and registered in such names as required by the Underwriter to
permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities
Act, may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the California Corporation Law, the Registrant's Amended
and Restated Certificate of Incorporation, the Registrant's Amended and Restated
Bylaws, the Registrant's indemnification agreements or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act, and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered hereunder, the Registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act, the information omitted from the form of Prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a
form of Prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of Prospectus shall
be deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
II-3
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Amendment to Registration Statement on Form S-1 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Santa Barbara, State of California, on this 19th day of November, 1996.
SUPERCONDUCTOR TECHNOLOGIES, INC.
By: /s/ JAMES G. EVANS, JR.
------------------------------------
James G. Evans, Jr.
Vice President, Chief Financial
Officer
and Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
- ------------------------------------------ ------------------------------ ------------------
<C> <S> <C>
DANIEL C. HU* President and Chief Executive November 19, 1996
- ------------------------------------------ Officer and Director
Daniel C. Hu
/s/ JAMES G. EVANS, JR. Vice President, Chief November 19, 1996
- ------------------------------------------ Financial Officer and
James G. Evans, Jr. Secretary
GLENN E. PENISTEN* Chairman of the Board November 19, 1996
- ------------------------------------------
Glenn E. Penisten
E. RAY COTTEN* Vice Chairman of the Board November 19, 1996
- ------------------------------------------
E. Ray Cotten
ROBERT P. CAREN* Director November 19, 1996
- ------------------------------------------
Robert P. Caren
CHARLES CROCKER* Director November 19, 1996
- ------------------------------------------
Charles Crocker
DENNIS HOROWITZ* Director November 19, 1996
- ------------------------------------------
Dennis Horowitz
J. ROBERT SCHRIEFFER* Director November 19, 1996
- ------------------------------------------
J. Robert Schrieffer
*By: /s/ JAMES G. EVANS, JR.
James G. Evans, Jr.
Attorney-in-Fact
</TABLE>
II-4
<PAGE> 7
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER EXHIBITS PAGE
- ----------- ----------------------------------------------------------------------------
<C> <S> <C>
1.1 Form of Underwriting Agreement.
(b)3.1 Amended and Restated Certificate of Incorporation of Registrant.
**3.2 Amended and Restated Bylaws of Registrant.
(a)4.1 Form of Registrant's Common Stock Certificate.
**4.2 Form of Underwriter's Warrant.
**5.1 Opinion of Wilson Sonsini Goodrich & Rosati regarding legality of the
securities being issued.
(a)*10.1 Technology Agreement between the Registrant and Lockheed Corporation dated
January 8, 1988.
(a)10.2 Technical Information Exchange Agreement between the Registrant and Philips
dated September 1989.
(a)10.3 Standard Industrial Lease between the Registrant and UML Real Estate
Partnership dated January 1, 1990; Sublease between Registrant and
Consolidated Packaging Machinery Company dba Industrial Automation
Corporation dated October 25, 1989.
(a)10.4 Form of Consulting Agreement.
(a)10.5 Form of Employee Proprietary Information Agreement.
(a)10.6 Offer of Employment Letter to William D. Baker dated December 21, 1991.
(a)10.7 Offer of Employment Letter to Gregory L. Hey-Shipton dated May 7, 1991, as
amended.
(a)10.8 1992 Director Option Plan.
(a)10.9 Form of Indemnification Agreement.
(a)10.10 License Agreement between the Registrant and the University of Arkansas
dated April 9, 1992, as amended.
(a)10.11 Loan and Security Agreement between the Registrant and Silicon Valley Bank
dated May 17, 1991, as amended.
(a)10.12 1992 Stock Option Plan.
(a)10.13 Proprietary Information & Patents Inventions Agreement among the Registrant,
E-Systems, Inc. and various other parties; Purchase Order dated October 10,
1991.
(a)*10.14 Joint Venture Company (JVC) Agreement between the Registrant and Sunpower
Incorporated dated April 2, 1992.
(a)10.15 Government Contract issued to Registrant by the Defense Advanced Research
Projects Agency through the Office of Naval Research dated September 4,
1991.
(a)10.16 Offer of Employment Letter to Daniel Hu dated November 23, 1992.
(b)*10.17 License Agreement between the Registrant and E.I. DuPont de Nemours and
Company dated December 1992.
(a)10.18 Note and Warrant Purchase Agreement dated December 28, 1992.
(b)10.19 Form of Representative's Warrant Agreement.
(c)*10.20 Superconductor Technologies Inc. Purchase Agreement.
(d)10.21 Loan and Security Agreement between Registrant and Silicon Valley Bank dated
August 26, 1994.
(d)10.22 Form of Distribution Agreement.
(d)10.23 Amended and Restated 1988 Stock Option Plan, as amended, with form of stock
option agreement.
(e)10.24 Amendment to Loan and Security Agreement between Registrant and Silicon
Valley Bank dated June 27, 1995.
**10.25 Joint Venture Agreement between the Registrant and Alantac Technologies (S)
Pte Ltd., dated May 20, 1996.
**23.1 Consent of Wilson Sonsini Goodrich & Rosati (included in Exhibit 5.1).
**23.2 Consent of Price Waterhouse LLP (see page II-6).
**24.1 Power of Attorney (See page II-5).
</TABLE>
<PAGE> 8
- ---------------
(a) Incorporated by reference from the Registrant's Registration Statement on
Form S-1 (Reg. No. 33-56714).
(b) Incorporated by reference from Amendment No. 1 to the Registrant's
Registration Statement on Form S-1 (Reg. No. 33-56714).
(c) Incorporated by reference from the Registrant's Annual Report on Form 10-K
filed for the fiscal year ended December 31, 1993.
(d) Incorporated by reference from the Registrant's Annual Report on Form 10-K
filed for the fiscal year ended December 31, 1994.
(e) Incorporated by reference from the Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31, 1995.
* Confidential treatment has been previously granted for certain portions of
these exhibits.
** Previously filed.
+ Confidential treatment requested.
<PAGE> 1
EXHIBIT 1.1
SUPERCONDUCTOR TECHNOLOGIES INC.
COMMON STOCK
(PAR VALUE $.001 PER SHARE)
UNDERWRITING AGREEMENT
<PAGE> 2
SUPERCONDUCTOR TECHNOLOGIES INC.
COMMON STOCK
(PAR VALUE $.001 PER SHARE)
UNDERWRITING AGREEMENT
November ___, 1996
Van Kasper & Company,
600 California Street
Suite 1700
San Francisco, California 94108
Dear Sirs:
Superconductor Technologies Inc., a Delaware corporation (the
"Company"), proposes, subject to the terms and conditions stated herein, to
issue and sell to Van Kasper & Company (the "Underwriter") an aggregate of
1,500,000 shares and, at the election of the Underwriter, up to 100,000
additional shares of Common Stock, par value $.001 per share ("Stock") of the
Company, and the Stockholder of the Company named in Schedule I hereto (the
"Selling Stockholder") proposes, subject to the terms and conditions stated
herein, to sell to the Underwriter an aggregate of 125,000 shares of Stock at
the election of the Underwriter. The aggregate of 1,500,000 shares to be sold by
the Company is herein called the "Firm Shares" and the aggregate of 225,000
additional shares to be sold by the Company and the Selling Stockholder at the
option of the Underwriter is herein called the "Optional Shares." The Firm
Shares and the Optional Shares which the Underwriter elects to purchase pursuant
to Section 2 hereof are herein collectively called the "Shares".
1. (a) The Company represents and warrants to, and agrees with,
the Underwriter that:
(i) A registration statement on Form S-1 (File No. 333-10569)
(the "Initial Registration Statement") in respect of the Firm Shares
and Optional Shares has been filed with the Securities and Exchange
Commission (the "Commission"); the Initial Registration Statement and
any post-effective amendment thereto, each in the form heretofore
delivered to you, have been declared effective by the Commission in
such form; other than a registration statement, if any, increasing the
size of the offering (a "Rule 462(b) Registration Statement"), filed
pursuant to Rule 462(b) under the Securities Act of 1933, as amended
(the "Act"), which became effective upon filing, no other document with
respect to the Initial Registration Statement has heretofore been filed
with the Commission; and no stop order suspending the effectiveness of
the Initial Registration Statement, any post-effective amendment
thereto or the Rule 462(b) Registration Statement, if any, has been
issued and no proceeding for that purpose has been initiated or
threatened by the Commission (any preliminary prospectus
<PAGE> 3
included in the Initial Registration Statement or filed with the
Commission pursuant to Rule 424(a) of the rules and regulations of the
Commission under the Act, being hereinafter called a "Preliminary
Prospectus"; the various parts of such registration statement,
including all exhibits thereto and including the information contained
in the form of final prospectus filed with the Commission pursuant to
Rule 424(b) under the Act in accordance with Section 5(a) hereof and
deemed by virtue of Rule 430A under the Act to be part of the Initial
Registration Statement at the time it was declared effective or part of
the 462(b) Registration Statement, if any, at such time as it became or
hereafter becomes effective, each as amended at the time such part of
the Initial Registration Statement became effective, or such part of
the Rule 462(b) Registration Statement, if any, became or hereafter
becomes effective, are hereinafter collectively called the
"Registration Statement," and such final prospectus, in the form filed
pursuant to Rule 424(b) under the Act, being hereinafter called the
"Prospectus");
(ii) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, and each
Preliminary Prospectus, at the time of filing thereof, conformed in all
material respects to the requirements of the Act and the rules and
regulations of the Commission thereunder, and did not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the Company
by (i) the Underwriter expressly for use therein or (ii) the Selling
Stockholder expressly for use in the preparation of the information
required to be presented therein pursuant to Item 7 of Form S-1;
(iii) The Registration Statement conforms, and the Prospectus
and any further amendments or supplements to the Registration Statement
or the Prospectus will conform, in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder and do not and will not, as of the applicable effective date
as to the Registration Statement and any amendment thereto and as of
the applicable filing date as to the Prospectus and any amendment or
supplement thereto, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by (i) the Underwriter
expressly for use therein or (ii) the Selling Stockholder expressly for
use in the preparation of the information required to be presented
therein pursuant to Item 7 of Form S-1;
(iv) The Company has not sustained since the date of the
latest audited financial statements included in the Prospectus any loss
or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, that is
material to the general affairs, management, financial position,
stockholders' equity or results of operations of the
2
<PAGE> 4
Company and, since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not
been any material change in the capital stock, short-term debt or
long-term debt of the Company or any material adverse change, or any
development involving a prospective material adverse change, in or
affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company, otherwise
than as set forth or contemplated in the Prospectus;
(v) The Company does not own any real property; the Company
has good and marketable title to all material personal property owned
by it, in each case free and clear of all liens, encumbrances and
defects except such as are described in the Prospectus or such as do
not materially affect the value of such property and do not interfere
with the use made and proposed to be made of such property by the
Company; and any material buildings held under lease by the Company are
held by it under valid, subsisting and enforceable leases with such
exceptions as are not material and do not interfere with the use made
and proposed to be made of such property and buildings by the Company;
(vi) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus, and
has been duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties, or conducts any
business, so as to require such qualification, or is subject to no
material liability or disability by reason of failure to be so
qualified in any such jurisdiction; and the Company does not own any
equity interests in any other entity, other than Cryo-Asia Pte Ltd;
(vii) The Company has an authorized capitalization as set
forth in the Prospectus, and all of the issued shares of capital stock
of the Company have been duly and validly authorized and issued, are
fully paid and nonassessable and conform to the description thereof
contained in the Prospectus under the caption "Description of Capital
Stock;"
(viii) The Shares to be issued and sold by the Company and the
Selling Stockholder to the Underwriter hereunder 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 nonassessable and will conform to the description of the Stock
contained in the Prospectus;
(ix) The issue and sale of the Firm Shares and Optional Shares
by the Company and the compliance by the Company with all of the
provisions of this Agreement and the consummation of the transactions
herein and therein contemplated will not conflict with or result in a
material breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust,
loan agreement, sale/leaseback agreement or other agreement or
instrument (collectively, the "Specified Documents") to which the
Company or any of its subsidiaries is a party or by which the Company
is bound or
3
<PAGE> 5
to which any of the property or assets of the Company is subject, nor
will such action result in any violation of the provisions of the
Certificate of Incorporation, as amended and restated, or the Restated
Bylaws of the Company or any statute or any order, rule or regulation
of any court or government agency or body having jurisdiction over the
Company or any of its properties; and no consent, approval,
authorization, order, registration or qualification of or with any such
court or governmental agency or body is required for the issue and sale
of the Shares or the consummation by the Company of the transactions
contemplated by this Agreement, except the registration under the Act
of the Shares and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and
distribution of the Shares by the Underwriter;
(x) Other than as set forth or contemplated in the Prospectus,
there are no legal or governmental proceedings pending to which the
Company is a party or of which any property of the Company is the
subject which, if determined adversely to the Company, would
individually or in the aggregate have a material adverse effect on the
consolidated financial position, stockholders' equity or results of
operations of the Company; and, to the best of the Company's knowledge,
no such proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(xi) To the knowledge of the Company, Price Waterhouse LLP,
who have certified financial statements of the Company, are independent
public accountants as required by the Act and the rules and regulations
of the Commission thereunder;
(xii) The Company owns, or possesses adequate rights to use,
all the patents, trademarks, service marks, trade names and copyrights
("Intellectual Property") necessary for the conduct of its business as
currently conducted by it; and to the best knowledge of the Company,
none of the activities engaged in by the Company infringes or conflicts
with Intellectual Property rights of others, except as described in the
Prospectus under the caption "Risk Factors";
(xiii) Except as set forth in the Prospectus, there are no
contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to file a
registration statement under the Securities Act with respect to any
securities of the Company owned or to be owned by such person or to
require the Company to include such securities in the securities
offered pursuant to the Prospectus to be registered pursuant to a
registration statement.
(b) The Selling Stockholder represents and warrants to, and agrees
with, the Underwriter and the Company that:
(i) All consents, approvals, authorizations and orders
necessary for the execution and delivery by the Selling Stockholder of
this Agreement, the Power of Attorney (the "Power
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<PAGE> 6
of Attorney") and the Custody Agreement (the "Custody Agreement")
hereinafter referred to, and for the sale and delivery of the Shares to
be sold by the Selling Stockholder hereunder, have been obtained; and
the Selling Stockholder has full right, power and authority to enter
into this Agreement, the Power of Attorney and the Custody Agreement
and to sell, assign, transfer and deliver the Shares to be sold by the
Selling Stockholder hereunder;
(ii) The sale of the Shares to be sold by the Selling
Stockholder hereunder and the compliance by the Selling Stockholder
with all of the provisions of this Agreement, the Power of Attorney and
the Custody Agreement and the consummation of the transactions herein
and therein contemplated will not result in a breach or violation of
any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other material
agreement or instrument to which the Selling Stockholder is a party or
by which the Selling Stockholder is bound or to which any of the
property or assets of the Selling Stockholder is subject, nor will such
action result in any violation of the provisions of the Certificate of
Incorporation or By-laws of the Selling Stockholder or any statute or
any order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Selling Stockholder or the property
of the Selling Stockholder;
(iii) The Selling Stockholder has good and valid title to the
Shares to be sold at the First or Second Time of Delivery (as defined
in Section 4 hereof), as the case may be, by the Selling Stockholder
hereunder, free and clear of all liens, encumbrances, equities and
claims, and immediately prior to the First or Second Time of Delivery,
as the case may be, the Selling Stockholder will have good and valid
title to the Shares to be sold at such Time of Delivery by the Selling
Stockholder hereunder, free and clear of all liens, encumbrances,
equities or claims; and, upon delivery of such Shares and payment
therefor pursuant hereto, good and valid title to such Shares, free and
clear of all liens, encumbrances, equities or claims, will pass to the
Underwriter;
(iv) The Selling Stockholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares; and
(v) To the extent that any statements or omissions made in the
Registration Statement, any Preliminary Prospectus, the Prospectus or
any amendment or supplement thereto are made in reliance upon and in
conformity with written information furnished to the Company by the
Selling Stockholder expressly for use therein, such Preliminary
Prospectus and the Registration Statement did, and the Prospectus and
any further amendments or supplements to the Registration Statement and
the Prospectus will, when they become effective or are filed with the
Commission, as the case may be, conform in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder and not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading.
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<PAGE> 7
In order to document the Underwriter's compliance with the reporting
and withholding provisions of the Tax Equity and Fiscal Responsibility Act of
1982 with respect to the transactions herein contemplated, the Selling
Stockholder agrees to deliver to you prior to or at the First or Second Time of
Delivery (as hereinafter defined) a properly completed and executed United
States Treasury Department Form W-9 (or Form W-8 if applicable, or other
applicable form or statement specified by Treasury Department regulations in
lieu thereof).
The Selling Stockholder represents and warrants that certificates in
negotiable form representing all of the Shares to be sold by the Selling
Stockholder hereunder have been placed in custody under a Custody Agreement, in
the form heretofore furnished to you, duly executed and delivered by the Selling
Stockholder to the Company as custodian (the "Custodian"), and that the Selling
Stockholder has duly executed and delivered a Power of Attorney, in the form
heretofore furnished to you, appointing the person indicated in Schedule I
hereto as the Selling Stockholder's attorney-in-fact (the "Attorney-in-Fact")
with authority to execute and deliver this Agreement on behalf of the Selling
Stockholder, to determine the purchase price to be paid by the Underwriter to
the Selling Stockholder as provided in Section 2 hereof, to authorize the
delivery of the Shares to be sold by the Selling Stockholder hereunder and
otherwise to act on behalf of the Selling Stockholder in connection with the
transactions contemplated by this Agreement and the Custody Agreement.
The Selling Stockholder specifically agrees that the Shares represented
by the certificates held in custody for the Selling Stockholder under the
Custody Agreement are subject to the interests of the Underwriter hereunder and
that the arrangements made by the Selling Stockholder for such custody, and the
appointment by the Selling Stockholder of the Attorney-in-Fact by the Power of
Attorney, are to that extent irrevocable. The Selling Stockholder specifically
agrees that the obligations of the Selling Stockholder hereunder shall not be
terminated (other than as set forth herein) by operation of law, by the
dissolution of the Selling Stockholder, or by the occurrence of any other event.
If the Selling Stockholder should be dissolved, or if any other such event
should occur, before the delivery of the Shares hereunder, certificates
representing the Shares shall be delivered by or on behalf of the Selling
Stockholder in accordance with the terms and conditions of this Agreement and of
the Custody Agreement, and actions taken by the Attorney-in-Fact pursuant to the
Powers of Attorney shall be as valid as if such dissolution or other event had
not occurred, regardless of whether or not the Custodian, the Attorney-in-Fact
or you shall have received notice of such dissolution or other event.
(c) The Selling Stockholder specifically agrees that, during the period
beginning from the date hereof and continuing to and including the date 180 days
after the date of the Prospectus, not to, directly or indirectly, offer, sell,
contract to sell or otherwise dispose of any Stock (other than pursuant to this
Agreement, bona fide gifts to persons who agree in writing with you to be bound
by the terms of this Agreement or your prior written consent);
2. Subject to the terms and conditions herein set forth, the Company
agrees to sell to the Underwriter, and the Underwriter agrees to purchase from
the Company at a purchase price per share of $______, 1,500,000 Firm Shares and
(b) in the event and to the extent that the Underwriter
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<PAGE> 8
exercises the election to purchase Optional Shares as provided below, the
Company and the Selling Stockholder, severally and not jointly, agree to issue
and sell to the Underwriter, and the Underwriter agrees to purchase from the
Company and the Selling Stockholder, at the purchase price per share set forth
in this Section 2, that portion of the number of Optional Shares as to which
such election shall have been exercised.
The Company and the Selling Stockholder, severally and not jointly,
hereby grant to the Underwriter the right to purchase at their election up to an
aggregate of 225,000 Optional Shares, in the respective amounts set forth
opposite the name of the Company and the Selling Stockholder in Schedule I
hereto, at the purchase price per share set forth in paragraph (a) of this
Section 2, for the sole purpose of covering over allotments in the sale of the
Firm Shares. Any such election to purchase Optional Shares may be exercised only
by written notice from you to the Company, given within a period of 45 calendar
days after the first date that any of the Firm Shares are released by you for
sale to the public, setting forth the aggregate number of Optional Shares to be
purchased and the date on which such Optional Shares are to be delivered, as
determined by you but in no event earlier than the First Time of Delivery (as
defined in Section 4 hereof) or, unless you and the Company and the Selling
Stockholder otherwise agree in writing, earlier than two or later than ten
business days after the date of such notice. In the event that the Underwriter
elects to purchase less than all of the Optional Shares, the first 125,000
Optional Shares shall be purchased from the Selling Stockholder and any
additional Optional Shares will be purchased from the Company.
3. Upon the authorization by you of the release of the Firm Shares, the
Underwriter proposes to offer the Firm Shares for sale upon the terms and
conditions set forth in the Prospectus.
4. Certificates in definitive form for the Shares to be purchased by
the Underwriter hereunder, and in such denominations and registered in such
names as the Underwriter may request upon at least 48 hours' prior notice to the
Company and the Selling Stockholder shall be delivered by or on behalf of the
Company and the Selling Stockholder to the Underwriter, against payment by the
Underwriter or on its behalf of the purchase price therefor by certified or
official bank check or checks or wire transfer, payable to the order of the
Company and the Selling Stockholder (which shall be delivered in care of the
Custodian), as their interests may appear in same day funds, or by payment in
such other manner as shall be agreed to in writing by the Company and the
Underwriter all at the offices of the Underwriter. The time and date of such
delivery and payment shall be, with respect to the Firm Shares, 9:00 a.m., San
Francisco time, on __________, 1996 , or at such other time and date as you and
the Company may agree upon in writing, and, with respect to the Optional Shares,
9:00 a.m., San Francisco time, on the date specified by you in the written
notice given by you of your election to purchase such Optional Shares, or at
such other time and date as you and the Company and the Selling Stockholder may
agree upon in writing. Such time and date for delivery of the Firm Shares is
herein called the "First Time of Delivery," such time and date for delivery of
the Optional Shares, if not the First Time of Delivery, is herein called the
"Second Time of Delivery," and each such time and date for delivery is herein
called a "Time of Delivery."
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<PAGE> 9
If registration of any certificate shall be requested in a name other
than that of the Underwriter, there shall be delivered to [_______________] a
Transfer Application with respect to the person in whose name registration of
such certificate is so requested. The certificates will be made available for
checking and packaging at least 24 hours prior to each Time of Delivery at such
place as is designated by the Underwriter.
If certificates in temporary form are issued, the Company agrees to
cause definitive certificates to be prepared as soon as practicable following
the Time of Delivery. After the preparation of definitive certificates, the
temporary certificates shall be exchangeable for definitive certificates upon
surrender of the temporary certificates, without charge to the holder thereof.
Until so exchanged, the Company agrees that the temporary certificates shall in
all respects be entitled to the same benefits as the definitive certificates.
5. The Company agrees with the Underwriter:
(a) To prepare the Prospectus in a form approved by you and to file
such Prospectus pursuant to Rule 424(b) under the Act not later than the
Commission's close of business on the second business day following the
execution and delivery of this Agreement, or, if applicable, such earlier time
as may be required by Rule 430A(a)(3) under the Act; to make no further
amendment or any supplement to the Registration Statement or Prospectus which
shall be disapproved by you promptly after reasonable notice thereof; to advise
you, promptly after it receives notice thereof, of the time when the
Registration Statement, or any amendment thereto, has been filed or becomes
effective or any supplement to the Prospectus or any amended Prospectus has been
filed and to furnish you with copies thereof; to advise you, promptly after it
receives notice thereof, of the issuance by the Commission of any stop order or
of any order preventing or suspending the use of any Preliminary Prospectus or
prospectus, of the suspension of the qualification of the Shares for offering or
sale in any jurisdiction, of the initiation or threatening of any proceeding for
any such purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or Prospectus or for additional
information; and, in the event of the issuance of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or prospectus or
suspending any such qualification, to use promptly its best efforts to obtain
its withdrawal;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Shares for offering and sale under the
securities laws of such jurisdictions as you may request and to comply with such
laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution of
the Shares, provided that in connection therewith the Company shall not be
required to qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction;
(c) To furnish the Underwriter with copies of the Prospectus in such
quantities as you may from time to time reasonably request, and, if the delivery
of a prospectus is required at any time prior to the expiration of nine months
after the time of the issue of the Prospectus in connection with the offering or
sale of the Shares and if at such time any event shall have occurred as a result
of which
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<PAGE> 10
the Prospectus as then amended or supplemented would include an untrue statement
of a material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made when such Prospectus is delivered, not misleading, or, if for any other
reason it shall be necessary during such same period to amend or supplement the
Prospectus in order to comply with the Act, to notify you and upon your request
to prepare and furnish without charge to you and to any dealer in securities as
many copies as you may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus which will correct such statement
or omission or effect such compliance, and in case the Underwriter is required
to deliver a prospectus in connection with sales of any of the Shares at any
time nine months or more after the time of issue of the Prospectus, upon your
request and at your expense, to prepare and deliver to you as many copies as you
may request of an amended or supplemented Prospectus complying with Section
10(a)(3) of the Act;
(d) To make generally available to its security holders as soon as
practicable, but in any event not later than 18 months after the effective date
of the Registration Statement (as defined in Rule 158(c)), an earnings statement
of the Company (which need not be audited) complying with Section 11(a) of the
Act and the rules and regulations thereunder (including at the option of the
Company Rule 158);
(e) (i) During the period beginning from the date hereof and continuing
to and including the date 180 days after the date of the Prospectus, not to
directly or indirectly, offer, sell, contract to sell or otherwise dispose of
Stock or other securities which are substantially similar to the Stock or which
are convertible or exchangeable into Stock or other securities which are
substantially similar to the Stock, without your prior written consent (other
than pursuant to (x) stock option or purchase plans existing on the date of this
Agreement or (y) the exercise, conversion or exchange of convertible,
exercisable or exchangeable securities outstanding on the date of this Agreement
or (z) the acquisition of a technology, a product line or an entity by the
Company in which Stock or such other securities are used as consideration,
provided that the recipients of such Stock or other securities shall agree not
to offer, sell, contract to sell or otherwise dispose of such Stock or such
other securities until after the expiration of the 180-day period after the
effective date of the Prospectus); and (ii) that it will use its reasonable
efforts to cause each person who has entered into a Lock-up Agreement to comply
therewith, will not grant any waivers or consents to non-compliance therewith
and will otherwise enforce its rights under each such agreement, in each case
unless and to the extent that it shall have obtained your prior written consent;
(f) During a period of five years from the effective date of the
Registration Statement, so long as the Company has outstanding Stock or other
securities registered under the Securities Exchange Act of 1934, as amended, to
make available to its stockholders as soon as practicable after the end of each
fiscal year an annual report (including a balance sheet and statements of
income, stockholders' equity and cash flow of the Company and its consolidated
subsidiaries certified by independent public accountants) and, as soon as
practicable after the end of each of the first three quarters of each fiscal
year (beginning with the fiscal quarter ending after the effective date of the
Registration Statement),
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<PAGE> 11
consolidated summary financial information of the Company and its subsidiaries
for such quarter in reasonable detail;
(g) During a period of five years from the effective date of the
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to stockholders, and deliver to
you (i) as soon as they are available, copies of any reports and financial
statements furnished to or filed with the Commission or any national securities
exchange on which any class of securities of the Company is listed; and (ii)
such additional information concerning the business and financial condition of
the Company as you may from time to time reasonably request (such financial
statements to be on a consolidated basis to the extent the accounts of the
Company are consolidated in reports furnished to its stockholders generally or
to the Commission); and
(h) To use its best efforts to have the Shares accepted for quotation
on the Nasdaq National Market.
6. The Company covenants and agrees with the Underwriter that, except
as provided below, the Company will pay or cause to be paid all costs and
expenses incident to the performance of the Company's obligations hereunder
including: (i) the fees, disbursements and expenses of the Company's counsel and
accountants in connection with the registration of the Shares under the Act and
all other expenses in connection with the preparation, printing and filing of
the Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriter and dealers; (ii) the cost of printing or producing
this Agreement, the Blue Sky Memorandum and any other documents in connection
with the offering, purchase, sale and delivery of the Shares; (iii) all expenses
in connection with the qualification of the Shares for offering and sale under
state securities laws as provided in Section 5(b) hereof, including the fees and
disbursements of counsel for the Underwriter in connection with such
qualification and in connection with the Blue Sky survey; (iv) the filing fees
and the fees and disbursements of counsel for the Underwriter incident to
securing any required review by the National Association of Securities Dealers,
Inc. of the underwriting terms of the sale of the Shares; (v) the cost of
preparing stock certificates; (vi) the cost and charges of any transfer agent or
registrar; and (vii) a non-accountable expense allowance of $150,000 payable to
the Underwriter. The Selling Stockholder shall pay its own legal expenses,
transfer or stamp taxes and underwriting discount relating to the Shares to be
sold by it. It is understood, however, that the Company shall bear, and the
Selling Stockholder shall not be required to pay or reimburse the Company for,
the cost of any other matters not directly relating to the sale and purchase of
the Shares pursuant to this Agreement and that, except as provided in this
Section , Section 8 and Section 11 hereof, the Underwriter will pay all of its
own costs and expenses, including the fees of its counsel, stock transfer taxes
on resale of any of the Shares by it, and any advertising expenses connected
with any offers it may make.
7. The obligations of the Underwriter hereunder, as to the Shares to be
delivered at each Time of Delivery, shall be subject, in its discretion, to the
condition that all representations and warranties and other statements of the
Company and the Selling Stockholder herein are, at and as of
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<PAGE> 12
such Time of Delivery, true and correct in all material respects, the condition
that each of the Company and the Selling Stockholder shall have performed in all
material respects its obligations hereunder theretofore to be performed, and the
following additional conditions:
(a) The Prospectus shall have been filed with the Commission pursuant
to Rule 424(b) within the applicable time period prescribed for such filing by
the rules and regulations under the Act and in accordance with Section 5(a)
hereof; no stop order suspending the effectiveness of the Registration Statement
or any part thereof shall have been issued and no proceeding for that purpose
shall have been initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been complied
with to your reasonable satisfaction;
(b) Baker & Botts, L.L.P., counsel for the Underwriter, shall have
furnished to you such opinion or opinions, dated such Time of Delivery, with
respect to the incorporation of the Company, this Agreement, the validity of the
Shares being delivered at such Time of Delivery, the Registration Statement, the
Prospectus, and other related matters as you may reasonably request, and such
counsel shall have received such papers and information as they may reasonably
request to enable them to pass upon such matters;
(c) Wilson Sonsini Goodrich and Rosati, A Professional Corporation,
counsel for the Company, shall have furnished to you their written opinion,
dated such Time of Delivery, in form and substance satisfactory to you, to the
effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus;
(ii) The Company has an authorized capitalization as set forth
in the Prospectus, and all of the issued shares of capital stock of the
Company (including the Shares being delivered at such Time of Delivery,
but with respect to such Shares to be issued and delivered by the
Company, when issued and delivered by the Company pursuant to this
Agreement against payment therefor) have been duly and validly
authorized and issued and are fully paid and nonassessable; and the
Shares conform to the description of the Stock contained in the
Prospectus under the caption "Description of Capital Stock;"
(iii) The Company has been duly qualified as a foreign
corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties, or conducts any business, so as to require such
qualification, or is subject to no material liability or disability by
reason of failure to be so qualified in any such jurisdiction (such
counsel being entitled to rely in respect of the opinion in this clause
upon certificates of Secretaries of State or other appropriate public
officials and in respect of matters of fact upon certificates of
officers of the Company, provided that such counsel shall
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state that they believe that both you and they are justified in relying
upon such officer's certificates);
(iv) To the best of such counsel's knowledge and other than as
set forth in the Prospectus, there are no legal or governmental
proceedings pending to which the Company is a party or of which any
property of the Company is the subject which, if determined adversely
to the Company, would individually or in the aggregate have a material
adverse effect on the consolidated financial position, stockholders'
equity or results of operations of the Company; and, to the best of
such counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(v) This Agreement has been duly authorized, executed and
delivered by the Company;
(vi) The issue and sale to you of the Shares being delivered
at such Time of Delivery by the Company in accordance with and upon the
terms and conditions set forth herein and the compliance by the Company
with all of the provisions of this Agreement and the consummation of
the transactions herein contemplated will not conflict with or result
in a breach or violation of any of the terms or provisions of, or
constitute a default under, any material Specified Document known to
such counsel (based solely on their review of the documents on a list
of material Specified Documents of the Company as certified by the
Chief Executive Officer and the Chief Financial Officer of the Company)
nor will such action result in any violation of the provisions of the
Certificate of Incorporation or By-laws of the Company or any statute,
or, to the knowledge of such counsel, any order, rule or regulation of
any court or governmental agency or body having jurisdiction over the
Company or any of its properties;
(vii) No consent, approval, authorization, order, registration
or qualification of or with any such court or governmental agency or
body is required for the issue and sale of the Shares or the
consummation by the Company of the transactions contemplated by this
Agreement, except the registration under the Act of the Shares, and
such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky
laws in connection with the purchase and distribution of the Shares by
the Underwriter; and
(viii) The Registration Statement and the Prospectus and any
further amendments and supplements thereto made by the Company prior to
such Time of Delivery (other than the financial statements and related
schedules therein, as to which such counsel need express no opinion)
comply as to form in all material respects with the requirements of the
Act and the rules and regulations thereunder.
Such counsel shall also state that, in connection with the preparation
of the Registration Statement and the Prospectus, they have participated in
conferences with officers and other
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representatives of the Company and with its certified public accountants, as
well as with representatives of the Underwriter and its counsel; and that at
such conferences, the contents of the Registration Statement and the Prospectus
and related matters were discussed. Although such counsel need not independently
verify or confirm, and may assume no responsibility for, the accuracy or
completeness of the statements contained in the Registration Statement or the
Prospectus, except as set forth in the opinion in subsection (ii) above, such
counsel shall state that nothing has come to their attention that has caused
them to believe that, as of its effective date, the Registration Statement or
any further amendment thereto made by the Company prior to such Time of Delivery
(other than the financial statements and related schedules therein, as to which
such counsel need express no opinion) contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
in which they were made, not misleading or that, as of its date, the Prospectus
or any further amendment or supplement thereto made by the Company prior to such
Time of Delivery (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion) contained an untrue
statement of a material fact or omitted to state a material fact necessary to
make the statements therein, in the light of the circumstances in which they
were made, not misleading or that, as of such Time of Delivery, either the
Registration Statement or the Prospectus or any further amendment or supplement
thereto made by the Company prior to such Time of Delivery (other than the
financial statements and related schedules therein, as to which such counsel
need express no opinion) contains an untrue statement of a material fact or
omits to state a material fact necessary to make the statements therein, in the
light of the circumstances in which they were made, not misleading; and they do
not know of any amendment to the Registration Statement required to be filed or
of any contracts or other documents of a character required to be filed as an
exhibit to the Registration Statement or required to be described in the
Registration Statement or the Prospectus which are not filed or described as
required;
In rendering such opinion, such counsel may state that they express no
opinion as to the laws of any jurisdiction other than the laws of the State of
California (excluding conflict of law rules), the General Corporation Law of the
State of Delaware, and the federal laws of the United States;
(d) The General Counsel or Associate General Counsel of the Selling
Stockholder, as indicated in Schedule I hereto, shall have furnished to you a
written opinion with respect to the Selling Stockholder, dated such Time of
Delivery, in form and substance satisfactory to you, to the effect that:
(i) A Power of Attorney and a Custody Agreement have been duly
authorized, executed and delivered by the Selling Stockholder and
constitute valid and binding agreements of the Selling Stockholder in
accordance with their terms;
(ii) This Agreement has been duly authorized, executed and
delivered by or on behalf of the Selling Stockholder; and the sale of
the Shares to be sold by the Selling Stockholder hereunder and the
compliance by the Selling Stockholder with all of the provisions of
this Agreement, the Power of Attorney and the Custody Agreement and the
consummation of the
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transactions herein and therein contemplated will not (a) conflict with
the laws of the State of Maryland or the federal laws of the United
States by which the Selling Stockholder is bound, or (b) result in a
breach or violation of any order, rule or regulation known to such
counsel of any court or governmental agency or body which, to such
counsel's knowledge, has jurisdiction over the Selling Stockholder or
the Stock of the Selling Stockholder;
(iii) No consent, approval, authorization or order of any
court or governmental agency or body is required for the consummation
of the transactions contemplated by this Agreement in connection with
the Shares to be sold by the Selling Stockholder hereunder, except such
as have been obtained under the Act and such as may be required under
state securities or Blue Sky laws or under the rules of the NASD in
connection with the purchase and distribution of such Shares by the
Underwriter; and
(iv) Title to such Shares, free of all adverse claims, has
been transferred to the Underwriter, assuming the Underwriter has
purchased such Shares in good faith and without notice of any such
adverse claim within the meaning of the Uniform Commercial Code;
In rendering such opinion, such counsel may state that they express no
opinion as to the laws of any jurisdiction other than the laws of the State of
Maryland (excluding conflict of law rules), the General Corporation Law of the
State of Delaware, and the federal laws of the United States;
(e) At 9:00 a.m., San Francisco time, on the effective date of the
Registration Statement and the effective date of the most recently filed
post-effective amendment to the Registration Statement and also at each Time of
Delivery, Price Waterhouse LLP shall have furnished to you a letter or letters,
dated the respective date of delivery thereof, in form and substance
satisfactory to you, to the effect set forth in Annex I hereto;
(f) (i) The Company shall not have sustained since the date of the
latest audited financial statements included in the Prospectus any loss or
interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus, and (ii) since the respective dates as of which
information is given in the Prospectus there shall not have been any change in
the capital stock (other than issuances of stock upon the exercise of stock
options which were outstanding on the date of the latest balance sheet included
in the Prospectus), short-term or long-term debt of the Company or any change,
or any development involving a prospective change, in or affecting the general
affairs, management, financial position, shareholders' equity or results of
operations of the Company otherwise than as set forth or contemplated in the
Prospectus, the effect of which, in any such case described in Clause (i) or
(ii), is in your judgment so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the Shares
being delivered at such Time of Delivery on the terms and in the manner
contemplated in the Prospectus;
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(g) On or after the date hereof there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange; (ii) a general moratorium on
commercial banking activities in New York declared by either Federal or New York
authorities; or (iii) the outbreak or escalation of hostilities involving the
United States or the declaration by the United States of a national emergency or
war, if the effect of any such event specified in this Clause (iii) in your
judgment makes it impracticable or inadvisable to proceed with the public
offering or delivery of the Shares being delivered at such Time of Delivery on
the terms and in the manner contemplated by the Prospectus;
(h) The Shares to be sold by the Company and the Selling Stockholder at
such Time of Delivery shall have been duly accepted, subject to notice of
issuance, for quotation on the Nasdaq National Market;
(i) The Company and the Selling Stockholder shall have furnished or
caused to be furnished to you at such Time of Delivery certificates of officers
of the Company and of the Selling Stockholder, respectively, satisfactory to you
as to the accuracy of the representations and warranties of the Company and the
Selling Stockholder, respectively, herein at and as of such Time of Delivery, as
to the performance by the Company and the Selling Stockholder of all of their
respective obligations hereunder to be performed at or prior to such Time of
Delivery, and as to such other matters as you may reasonably request and the
Company shall have furnished or caused to be furnished certificates as to the
matters set forth in subsections (a) and (f) of this Section and as to such
other matters as you may reasonably request; and
(j) On or prior to the First Time of Delivery, the Company's officers
and directors and the Selling Stockholder shall have entered into a Lock-up
Agreement with the Underwriter that during the period beginning from the date
hereof and continuing to and including the date 180 days after the date of this
Prospectus not to, directly or indirectly, offer, sell, contract to sell, grant
any option to purchase, or otherwise dispose of any Stock (other than pursuant
to bona fide gifts to persons who agree in writing with you to be bound by the
terms of such agreement).
8. (a) The Company will indemnify and hold harmless the Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
the Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse the Underwriter for any legal or
other expenses reasonably incurred by the Underwriter in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company and the Selling Stockholder shall
not be liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in any Preliminary
Prospectus, the Registration Statement or the Prospectus or any such
15
<PAGE> 17
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by the Underwriter expressly for use
therein.
(b) The Selling Stockholder will indemnify and hold harmless the
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which the Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in any Preliminary Prospectus, the Registration
Statement or the Prospectus or any such amendment or supplement in reliance upon
and in conformity with written information furnished to the Company by the
Selling Stockholder expressly for use therein; and will reimburse the
Underwriter for any legal or other expenses reasonably incurred by the
Underwriter in connection with investigating or defending any such action or
claim as such expenses are incurred; provided, however, that (i) the Selling
Stockholder shall not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
any Preliminary Prospectus, the Registration Statement or the Prospectus or any
such amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by the Underwriter expressly for use
therein and (ii) in no event shall the liability of any Selling Stockholder
under this subsection (b) exceed the total net proceeds from the sale of Shares
by the Selling Stockholder hereunder.
(c) The Underwriter will indemnify and hold harmless the Company and
the Selling Stockholder against any losses, claims, damages or liabilities to
which the Company or the Selling Stockholder may become subject, under the Act
or otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in any Preliminary
Prospectus, the Registration Statement or the Prospectus or any such amendment
or supplement in reliance upon and in conformity with written information
furnished to the Company by the Underwriter expressly for use therein; and will
reimburse the Company and the Selling Stockholder for any legal or other
expenses reasonably incurred by the Company or the Selling Stockholder in
connection with investigating or defending any such action or claim as such
expenses are incurred.
(d) Promptly after receipt by an indemnified party under subsection
(a), (b) or (c) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof
16
<PAGE> 18
is to be made against the indemnifying party under such subsection, notify the
indemnifying party in writing of the commencement thereof; but the omission so
to notify the indemnifying party shall not relieve it from any liability which
it may have to any indemnified party otherwise than under such subsection. In
case any such action shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it shall
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel reasonably satisfactory to such indemnified
party (who shall not, except with the consent of the indemnified party, be
counsel to the indemnifying party), and, after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified party
under such subsection for any legal expenses of other counsel or any other
expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs of
investigation.
(e) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a), (b) or (c) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Selling Stockholder on the one
hand and the Underwriter on the other from the offering of the Shares. If,
however, the allocation provided by the immediately preceding sentence is not
permitted by applicable law or if the indemnified party failed to give the
notice required under subsection (d) above, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company, the Selling Stockholder on the one hand and
the Underwriter on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable considerations. The
relative benefits received by the Company, the Selling Stockholder and the
Underwriter shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Shares purchased under this Agreement (before
deducting expenses) received by the Company and the Selling Stockholder bear to
the total underwriting discount and nonaccountable expense reimbursements
received by the Underwriter with respect to the Shares purchased under this
Agreement, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company, the Selling Stockholder or the Underwriter and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company, the Selling
Stockholder and the Underwriter agree that it would not be just and equitable if
contributions pursuant to this subsection (e) were determined solely by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to above in this subsection (e). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
in this subsection (e) shall be deemed to
17
<PAGE> 19
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (e), (i) the Underwriter shall
not be required to contribute any amount in excess of the amount by which the
total price at which the Shares underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which the
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission, and (ii) the Selling
Stockholder shall not be required to contribute any amount in excess of the net
proceeds from the sale of Stock by the Selling Stockholder hereunder. 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.
(f) The obligations of the Company and the Selling Stockholder under
this Section 8 shall be in addition to any liability which the Company and the
Selling Stockholder may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls the Underwriter within the
meaning of the Act; and the obligations of the Underwriter under this Section 8
shall be in addition to any liability which the Underwriter may otherwise have
and shall extend, upon the same terms and conditions, to each officer and
director of the Company and to each person, if any, who controls the Company or
the Selling Stockholder within the meaning of the Act.
9. The respective indemnities, agreements, representations, warranties
and other statements of the Company, the Selling Stockholder and the
Underwriter, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of the Underwriter or any controlling person of the
Underwriter, or the Company or the Selling Stockholder, or any officer or
director or controlling person of the Company or controlling person of the
Selling Stockholder, and shall survive delivery of and payment for the Shares.
10. If this Agreement shall be terminated pursuant to Section 7(g)
hereof, neither the Company nor the Selling Stockholder shall be under any
liability to the Underwriter except as provided in Section 6 (limited in such
circumstances to an amount not to exceed $100,000) and Section 8 hereof; but, if
for any other reason any Shares are not delivered by or on behalf of the Company
and the Selling Stockholder as provided herein, the Company and the Selling
Stockholder pro rata (based on the number of Shares to be sold by the Company
and the Selling Stockholder hereunder) will reimburse the Underwriter for all
out-of-pocket expenses, including fees and disbursements of counsel, reasonably
incurred by the Underwriter in making preparations for the purchase, sale and
delivery of the Shares not so delivered, but the Company and the Selling
Stockholder shall then be under no further liability to the Underwriter in
respect of the Shares not so delivered except as provided in Section 6 and
Section 8 hereof.
11. In all dealings with the Selling Stockholder hereunder, you and the
Company shall be entitled to act and rely upon any statement, request, notice or
agreement on behalf of the Selling Stockholder made or given by the
Attorney-in-Fact for the Selling Stockholder.
18
<PAGE> 20
All statements, requests, notices, and agreements hereunder shall be in
writing, and if to the Underwriter shall be delivered or sent by mail, telex or
facsimile transmission to you at Van Kasper & Company, 600 California Street,
Suite 1700, San Francisco, California 94108, Attention: Corporate Finance
Department; if to the Selling Stockholder shall be delivered or sent by mail,
telex or facsimile transmission to counsel for the Selling Stockholder at its
address set forth in Schedule II hereto; and if to the Company shall be
delivered or sent by mail, telex or facsimile transmission to the address of the
Company set forth in the Registration Statement, Attention: Secretary.
12. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriter, the Company and the Selling Stockholder, and, to
the extent provided in Section 8 and Section 9 hereof, the officers and
directors of the Company and each person who controls the Company, the Selling
Stockholder or the Underwriter, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right by virtue of this Agreement. No purchaser of any of the Shares
from the Underwriter shall be deemed a successor or assign by reason merely of
such purchase.
13. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
14. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF CALIFORNIA.
15. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
If the foregoing is in accordance with your understanding, please sign
and return to us seven counterparts hereof, and upon the acceptance hereof by
you, this letter and such acceptance hereof shall constitute a binding agreement
among each of the Company, the Selling Stockholder and the Underwriter.
19
<PAGE> 21
Any person executing and delivering this Agreement as Attorney-in-Fact
for the Selling Stockholder represents by so doing that he has been duly
appointed as Attorney-in-Fact by the Selling Stockholder pursuant to a validly
existing and binding Power of Attorney which authorizes such Attorney-in-Fact to
take such action.
Very truly yours,
SUPERCONDUCTOR TECHNOLOGIES INC.
By:
----------------------------------
Name:
-----------------------------
Title:
----------------------------
SELLING STOCKHOLDER
[as listed on Schedule I hereto]
By:
-----------------------------------
Name: James G. Evans, Jr.
As Attorney-in-Fact acting on behalf of the Selling Stockholder named in
Schedule I to this Agreement.
Accepted as of the date hereof:
VAN KASPER & COMPANY
By:
-----------------------------------
Ronald F. Richards
Vice President, Corporate Finance
20
<PAGE> 22
SCHEDULE I
<TABLE>
<CAPTION>
NUMBER OF
OPTIONAL
TOTAL SHARES TO BE
NUMBER OF SOLD IF
FIRM MAXIMUM
SHARES TO BE OPTION
SOLD EXERCISED
------------ ------------
<S> <C> <C>
The Company................................ 1,500,000 100,000
The Selling Stockholder
Lockheed Martin Corporation (a)... 125,000
6801 Rockledge Drive
Bethesda, Maryland 20817
--------- -------
Total............................. 1,500,000 225,000
========= =======
</TABLE>
- ------------
(a) The Selling Stockholder is represented by Stephen M. Piper, Associate
General Counsel of Lockheed Martin Corporation, and has appointed James G.
Evans, Jr. as Attorney-in-Fact for the Selling Stockholder.
<PAGE> 23
ANNEX I
Pursuant to Section 7(e) of the Underwriting Agreement, Price
Waterhouse LLP shall furnish letters to the Underwriter to the effect that:
(i) They are independent certified public accountants with
respect to the Company within the meaning of the Act and the applicable
published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules audited (and, if
applicable, prospective financial statements and/or pro forma financial
information examined) by them and included in the Prospectus or the
Registration Statement comply as to form in all material respects with
the applicable accounting requirements of the Act and the related
published rules and regulations thereunder; and, if applicable, they
have made a review in accordance with standards established by the
American Institute of Certified Public Accountants of the unaudited
consolidated interim financial statements, selected financial data, pro
forma financial information, prospective financial statements and/or
condensed financial statements derived from audited financial
statements of the Company for the periods specified in such letter, as
indicated in their reports thereon, copies of which have been furnished
to the representatives of the Underwriter (the "Representatives");
(iii) On the basis of limited procedures, not constituting an
audit in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available
interim financial statements of the Company, inspection of the minute
books of the Company since the date of the latest audited financial
statements included in the Prospectus, inquiries of officials of the
Company responsible for financial and accounting matters and such other
inquiries and procedures as may be specified in such letter, nothing
came to their attention that caused them to believe that:
(A) any unaudited consolidated statements of income,
consolidated balance sheets and consolidated statements of
cash flows as of dates or for periods beginning after ______
included in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements
of the Act and the related published rules and regulations
thereunder, or are not in conformity with generally accepted
accounting principles applied on a basis substantially
consistent with the basis for the audited consolidated
statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the
Prospectus;
(B) any other unaudited income statement data and
balance sheet items for the periods or as of the dates
referred to in Clause (A) above included in the Prospectus do
not agree with the corresponding items in the unaudited
consolidated financial statements from which such data and
items were derived, and any such unaudited data and items were
not determined on a basis substantially consistent with
<PAGE> 24
the basis for the corresponding amounts in the audited
consolidated financial statements included in the Prospectus;
(C) the unaudited financial statements which were not
included in the Prospectus but from which were derived any
unaudited condensed financial statements as of dates or for
periods beginning after ______ and any unaudited income
statement data and balance sheet items included in the
Prospectus and referred to in Clause (B) were not determined
on a basis substantially consistent with the basis for the
audited consolidated financial statements included in the
Prospectus;
(D) any unaudited pro forma consolidated condensed
financial statements included in the Prospectus do not comply
as to form in all material respects with the applicable
accounting requirements of the Act and the published rules and
regulations thereunder or the pro forma adjustments have not
been properly applied to the historical amounts in the
compilation of those statements;
(E) as of a specified date not more than five days
prior to the date of such letter, there have been any changes
in the consolidated capital stock (other than issuances of
capital stock upon exercise of options and stock appreciation
rights, upon earn-outs of performance shares and upon
conversions of convertible securities, in each case which were
outstanding on the date of the latest financial statements
included in the Prospectus) or any increase in the
consolidated long-term debt of the Company, or any decreases
in consolidated net current assets or net assets or other
items specified by the Representatives or any increases in any
items specified by the Representatives, in each case as
compared with amounts shown in the latest balance sheet
included in the Prospectus; except in each case for changes,
increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter;
and
(F) for the period from the date of the latest
financial statements included in the Prospectus to the
specified date referred to in Clause (E) there were any
decreases in consolidated net revenues or operating profit or
the total or per share amounts of consolidated net income or
other items specified by the Representatives, or any increases
in any items specified by the Representatives, in each case as
compared with the comparable period of the preceding year and
with any other period of corresponding length specified by the
Representatives, except in each case for decreases or
increases which the Prospectus discloses have occurred or may
occur or which are described in such letter; and
(iv) In addition to the audit referred to in their report(s)
included in the Prospectus and the limited procedures, inspection of
minute books, inquiries and other procedures referred to in paragraph
(iii) above, they have carried out certain specified procedures, not
constituting an audit in accordance with generally accepted auditing
standards, with respect
2
<PAGE> 25
to certain amounts, percentages and financial information specified by
the Representatives, which are derived from the general accounting
records of the Company and its subsidiaries, which appear in the
Prospectus, or in Part II of, or in exhibits and schedules to, the
Registration Statement specified by the Representatives, and have
compared certain of such amounts, percentages and financial information
with the accounting records of the Company and have found them to be in
agreement.
3
