2,500,000 Shares
▇-▇▇▇.▇▇▇ Corp.
Common Stock
UNDERWRITING AGREEMENT
----------------------
November __, 1999
CIBC World Markets Corp.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Read
Josephthal & Co., Inc.
c/o CIBC World Markets Corp.
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
On behalf of the Several
Underwriters named on
Schedule I attached hereto.
Ladies and Gentlemen:
▇-▇▇▇.▇▇▇ Corp., a Pennsylvania corporation (the "Company"), proposes to
sell to you and the other underwriters named on Schedule I to this Agreement
(the "Underwriters"), for whom you are acting as Representatives, an aggregate
of 2,500,000 shares (the "Firm Shares") of the Company's Common Stock, $.10 par
value (the "Common Stock"). The respective amounts of the Firm Shares to be
purchased by each of the several Underwriters are set forth opposite their names
on Schedule I hereto. In addition, the Company proposes to grant to the
Underwriters an option to purchase up to an additional 375,000 shares (the
"Option Shares") of Common Stock for the purpose of covering over-allotments in
connection with the sale of the Firm Shares. The Firm Shares and the Option
Shares are together called the "Shares."
1. Sale and Purchase of the Shares.
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On the basis of the representations, warranties and agreements
contained in, and subject to the terms and conditions of, this Agreement:
(a) The Company agrees to sell to each of the Underwriters, and each
of the Underwriters agrees, severally and not jointly, to purchase from the
Company, at $_____ per share (the "Initial Price"), the number of Firm Shares
set forth opposite the name of such Underwriter on Schedule I to this Agreement,
subject to adjustment in accordance with Section 10 hereof.
(b) The Company grants to the several Underwriters an option to
purchase, severally and not jointly, all or any part of the Option Shares at the
Initial Price. The number of Option Shares to be purchased by each Underwriter
shall be the same percentage (adjusted by the Representatives to eliminate
fractions) of the total number of Option Shares to be purchased by the
Underwriters as such Underwriter is purchasing of the Firm Shares. Such option
may be exercised only to cover over-allotments in the sales of the Firm Shares
by the Underwriters and may be exercised in whole or in part at any time on or
before 12:00 noon, New York City time, on the business day before the Firm
Shares Closing Date (as defined below), and only once thereafter within 30 days
after the date of this Agreement, in each case upon written or telegraphic
notice, or verbal or telephonic notice confirmed by written or telegraphic
notice, by the Representatives to the Company no later than 12:00 noon, New York
City time, on the business day before the Firm Shares Closing Date or at least
two business days before the Option Shares Closing Date (as defined below), as
the case may be, setting forth the number of Option Shares to be purchased and
the time and date (if other than the Firm Shares Closing Date) of such purchase.
2. Delivery and Payment. Delivery by the Company of the Firm Shares to
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the Representatives for the respective accounts of the Underwriters, and payment
of the purchase price by wire transfer (same day) funds to the Company, shall
take place at the offices of CIBC World Markets Corp., at ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, at 10:00 a.m., New York City
time, on the third business day following the date of this Agreement, or at such
time on such other date, not later than 10 business days after the date of this
Agreement, as shall be agreed upon by the Company and the Representatives (such
time and date of delivery and payment are called the "Firm Shares Closing
Date").
In the event the option with respect to the Option Shares is exercised,
delivery by the Company of the Option Shares to the Representatives for the
respective accounts of the Underwriters and payment of the purchase price by
wire transfer (same day) funds to the Company shall take place at the offices of
CIBC World Markets Corp, specified above at the time and on the date (which may
be the same date as, but in no event shall be earlier than, the Firm Shares
Closing Date) specified in the notice referred to in
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Section 1(b) (such time and date of delivery and payment are called the "Option
Shares Closing Date"). The Firm Shares Closing Date and the Option Shares
Closing Date are called, individually, a "Closing Date" and, together, the
"Closing Dates."
Certificates evidencing the Shares shall be registered in such names and
shall be in such denominations as the Representatives shall request at least two
full business days before the Firm Shares Closing Date or, in the case of Option
Shares, on the day of notice of exercise of the option as described in Section
1(b) and shall be made available to the Representatives for checking and
packaging, at such place as is designated by the Representatives, on the full
business day before the Firm Shares Closing Date (or the Option Shares Closing
Date in the case of the Option Shares).
3. Registration Statement and Prospectus; Public Offering.
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(a) A registration statement (No. 333-87909) relating to the Shares,
including a form of prospectus, has been filed with the Securities and Exchange
Commission ("Commission") and either (A) has been declared effective under the
Securities Act of 1933 (the "Securities Act") and is not proposed to be amended
or (B) is proposed to be amended by post-effective amendment. If such
registration statement (the "initial registration statement") has been declared
effective, (A) an additional registration statement (the "additional
registration statement") relating to the Shares may have been filed with the
Commission pursuant to Rule 462(b) ("Rule 462(b)") under the Securities Act and,
if so filed, has become effective upon filing pursuant to such Rule and the
Shares all have been duly registered under the Securities Act pursuant to the
initial registration statement and, if applicable, the additional registration
statement or (B) such an additional registration statement may be proposed to be
filed with the Commission pursuant to Rule 462(b) in which case it will become
effective upon filing pursuant to such Rule and upon such filing the Shares will
all have been duly registered under the Securities Act pursuant to the initial
registration statement and such additional registration statement. If the
Company does not propose to amend the initial registration statement or if an
additional registration statement has been filed and the Company does not
propose to amend it, and if any post-effective amendment to either such
registration statement has been filed with the Commission prior to the execution
and delivery of this Agreement, the most recent amendment (if any) to each such
registration statement has been declared effective by the Commission or has
become effective upon filing pursuant to Rule 462(c) ("Rule 462(c)") under the
Securities Act or, in the case of an additional registration statement, Rule
462(b). For purposes of this Agreement, "Effective Time" with respect to each of
the initial registration statement and, if filed prior to the execution and
delivery of this Agreement, the additional registration statement means (A) if
the Company has advised the Representatives that it does not propose to amend
such registration statement, the date and time as of which such registration
statement, or the most recent post-effective amendment thereto (if any) filed
prior to the execution and delivery of this Agreement, was declared effective by
the Commission or has become effective upon filing pursuant to Rule 462(c), or
(B) if the Company has advised the Representatives that it proposes to file an
amendment or post-effective amendment to such registration statement, the date
and time as of which such registration statement, as amended by such amendment
or post-effective amendment, as the case may be, is
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declared effective by the Commission. If an additional registration statement
has not been filed prior to the execution and delivery of this Agreement but the
Company has advised the Representatives that it proposes to file one, "Effective
Time" with respect to such additional registration statement means the date and
time as of which such registration statement is filed and becomes effective
pursuant to Rule 462(b). "Effective Date" with respect to the initial
registration statement and the additional registration statement (if any) means
the date of the Effective Time thereof. The initial registration statement, as
amended at its Effective Time, including all material incorporated by reference
therein, including all information contained in the additional registration
statement (if any) and deemed to be a part of the initial registration statement
as of the Effective Time of the additional registration statement pursuant to
the General Instructions of the Form on which it is filed and including all
information (if any) deemed to be a part of the initial registration statement
as of its Effective Time pursuant to Rule 430A(b) ("Rule 430A(b)") under the
Securities Act, is hereinafter referred to as the "Initial Registration
Statement." The additional registration statement, as amended at its Effective
Time, including the contents of the initial registration statement incorporated
by reference therein and including all information (if any) deemed to be a part
of the additional registration statement as of its Effective Time pursuant to
Rule 430A(b), is hereinafter referred to as the "Additional Registration
Statement." The Initial Registration Statement and the Additional Registration
Statement, if any, are hereinafter referred to collectively as the "Registration
Statements" and individually as a "Registration Statement." The form of
prospectus relating to the Shares, as first filed with the Commission pursuant
to and in accordance with Rule 424(b) ("Rule 424(b)") under the Securities Act
or (if no such filing is required) as included in a Registration Statement,
including all material incorporated by reference in such prospectus, is
hereinafter referred to as the "Prospectus." No document has been or will be
prepared or distributed in reliance on Rule 434 under the Securities Act.
(b) The Company understands that the Underwriters propose to make a
public offering of the Shares, as set forth in and pursuant to the Prospectus,
as soon after the Effective Time and the date of this Agreement as the
Representatives deem advisable. The Company hereby confirms that the
Underwriters and dealers have been authorized to distribute or cause to be
distributed the preliminary prospectus dated ___________, as it may be amended
(the "Preliminary Prospectus") and are authorized to distribute the Prospectus
(as from time to time amended or supplemented if the Company furnishes
amendments or supplements thereto to the Underwriters).
4. Representations and Warranties of the Company. The Company hereby
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represents and warrants to each Underwriter as follows:
(a) If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement: (i) on the Effective Date
of the Initial Registration Statement, the Initial Registration Statement
conformed in all respects to the requirements of the Securities Act and the
rules and regulations of the Commission (the "Rules") and did not include 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,
(ii) on the Effective Date of the Additional Registration Statement (if
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any), each Registration Statement conformed or will conform, in all respects to
the requirements of the Securities Act and the Rules and did not include, or
will not include, any untrue statement of a material fact and did not omit, or
will not omit, to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and (iii) on the date
of this Agreement, the Initial Registration Statement and, if the Effective Time
of the Additional Registration Statement is prior to the execution and delivery
of this Agreement, the Additional Registration Statement each conforms, and at
the time of filing of the Prospectus pursuant to Rule 424(b) or (if no such
filing is required) at the Effective Date of the Additional Registration
Statement in which the Prospectus is included, each Registration Statement and
the Prospectus will conform, in all respects to the requirements of the
Securities Act and the Rules, and neither of such documents includes, or will
include, any untrue statement of a material fact or omits, or will omit, to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading. If the Effective Time of the Initial
Registration Statement is subsequent to the execution and delivery of this
Agreement: on the Effective Date of the Initial Registration Statement, the
Initial Registration Statement and the Prospectus will conform in all respects
to the requirements of the Act and the Rules, neither of such documents will
include any untrue statement of a material fact or will omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and no Additional Registration Statement has been or
will be filed. Notwithstanding the foregoing, the Company makes no
representation or warranty as to the statements contained in the third paragraph
under the caption "Underwriting" in the Prospectus. The Company acknowledges
that the statements referred to in the previous sentence constitute the only
information furnished in writing by the Representatives on behalf of the several
Underwriters specifically for inclusion in the Registration Statements, any
preliminary prospectus or the Prospectus. The Company and the transactions
contemplated by this Agreement meet the requirements for using Form S-3 under
the Securities Act.
(b) All contracts and other documents required to be filed as
exhibits to the Registration Statements have been filed with the Commission as
exhibits to the Registration Statements. The documents incorporated by reference
in the Registration Statement and the Prospectus, at the time they were filed
with the Commission, complied in all material respects with the requirements of
the Exchange Act and, when read together and with the other information in the
Registration Statement and the Prospectus, do not contain an untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(c) The consolidated financial statements of the Company (including
all notes and schedules thereto) included or incorporated by reference in the
Registration Statements and Prospectus present fairly the financial position,
the results of operations and cash flows and the shareholders' equity of the
Company at the respective dates and for the respective periods to which they
apply; and such financial statements have been prepared in conformity with
generally accepted accounting principles, consistently applied throughout the
periods involved, and all adjustments necessary for a fair presentation of the
results for such periods have been
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made. The summary and selected financial data included in the Prospectus present
fairly the information shown therein as at the respective dates and for the
respective periods specified and the summary and selected financial data have
been presented on a basis consistent with the consolidated financial statements
so set forth in the Prospectus and other financial information.
(d) KPMG LLP, whose reports are filed with the Commission as a part
of the Registration Statements, are and, during the periods covered by their
reports, were independent public accountants as required by the Securities Act
and the Rules.
(e) The Company and its subsidiaries have each been duly incorporated
and are validly existing as corporations in good standing under the laws of the
jurisdiction of its incorporation. Each of the Company and its subsidiaries is
duly qualified and in good standing as a foreign corporation in each
jurisdiction in which the character or location of its assets or properties
(owned, leased or licensed) or the nature of its business makes such
qualification necessary except for such jurisdictions where the failure to so
qualify would not have a material adverse effect on the assets or properties,
business, results of operations or financial condition of the Company and its
subsidiaries, taken as a whole. Each of the Company and its subsidiaries has all
requisite corporate power and authority, and all necessary authorizations,
approvals, consents, orders, licenses, certificates and permits of and from all
governmental or regulatory bodies or any other person or entity, to own, lease
and license its assets and properties and conduct its businesses as now being
conducted and as described in the Registration Statements and the Prospectus
except for such authorizations, approvals, consents, orders, material licenses,
certificates and permits the failure to so obtain would not have a material
adverse effect upon the assets or properties, business, results of operations,
prospects or condition (financial or otherwise) of the Company and its
subsidiaries, taken as a whole; and the Company has all such corporate power and
authority, and such authorizations, approvals, consents, orders, licenses,
certificates and permits to enter into, deliver and perform this Agreement and
to issue and sell the Shares.
(f) Each of the Company and its subsidiaries owns or possesses
adequate and enforceable rights to use all trademarks, trademark applications,
trade names, service marks, copyrights, copyright applications, licenses, know-
how and other similar rights and proprietary knowledge (collectively,
"Intangibles") necessary for the conduct of its business as described in the
Registration Statements and the Prospectus. Neither the Company nor any of its
subsidiaries has received any notice of, or is aware of, any infringement of or
conflict with asserted rights of others with respect to any Intangibles.
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(g) There is no litigation or governmental or other proceeding or
investigation before any court or before or by any public body or board pending
or, to the Company's best knowledge, threatened against, or involving the
assets, properties or business of, the Company or any of its subsidiaries which
would materially adversely affect the value or the operation of any such assets
or properties or the business, results of operations, prospects or condition
(financial or otherwise) of the Company and its subsidiaries taken as a whole or
which is required to be disclosed in the Registration Statement and the
Prospectus that is not so disclosed.
(h) Subsequent to the respective dates as of which information is
given in the Registration Statements and the Prospectus, except as described
therein, (i) there has not been any material adverse change in the assets or
properties, business, results of operations, prospects or condition (financial
or otherwise), of the Company and its subsidiaries taken as a whole, whether or
not arising from transactions in the ordinary course of business; (ii) the
Company and its subsidiaries taken as a whole have not sustained any material
loss or interference with its assets, businesses or properties (whether owned or
leased) from fire, explosion, earthquake, flood or other calamity, whether or
not covered by insurance, or from any labor dispute or any court or legislative
or other governmental action, order or decree; and (iii) since the date of the
latest balance sheet included in the Registration Statements and the Prospectus,
except as reflected therein, neither the Company nor any of its subsidiaries has
(A) issued any securities or incurred any liability or obligation, direct or
contingent, for borrowed money, except for such liabilities or obligations
incurred in the ordinary course of business and such securities issued to
employees in connection with the grant or exercise of options to acquire the
Company's Common Stock consistent with past practice and securities issued in
connection with the transactions with ▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ Corporation and Silicon
Valley Communications, Inc., (B) entered into any transaction not in the
ordinary course of business or (C) declared or paid any dividend or made any
distribution on any shares of its stock or redeemed, purchased or otherwise
acquired or agreed to redeem, purchase or otherwise acquire any shares of its
stock.
(i) There is no document or contract of a character required to be
described in the Registration Statements or Prospectus or to be filed as an
exhibit to the Registration Statements which is not described or filed as
required. Except for this Agreement if only a form has been previously filed,
each agreement listed in the Exhibits to the Registration Statements or
incorporated by reference therein is in full force and effect and is valid and
enforceable by and against the Company in accordance with its terms, assuming
the due authorization, execution and delivery thereof by each of the other
parties thereto. Neither the Company, nor to the best of the Company's
knowledge, any other party is in default in the observance or performance of any
term or obligation to be performed by it under any such agreement, and no event
has occurred which with notice or lapse of time or both would constitute
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such a default, in any such case which default or event would have a material
adverse effect on the assets or properties, business, results of operations,
prospects or condition (financial or otherwise) of the Company and its
subsidiaries taken as a whole. No default exists, and no event has occurred
which with notice or lapse of time or both would constitute a default, in the
due performance and observance of any term, covenant or condition, by the
Company or any of its subsidiaries of any other agreement or instrument to which
the Company or any such subsidiary is a party or by which it or its properties
or business may be bound or affected which default or event would have a
material adverse effect on the assets or properties, business, results of
operations, prospects or condition (financial or otherwise) of the Company and
its subsidiaries taken as a whole.
(j) Neither the Company nor any of its subsidiaries is in violation
of any term or provision of its charter or by-laws or of any franchise, license,
permit, judgment, decree, order, statute, rule or regulation, where the
consequences of such violation would have a material adverse effect on the
assets or properties, business, results of operations, prospects or condition
(financial or otherwise) of the Company.
(k) Neither the execution, delivery and performance of this Agreement
by the Company nor the consummation of any of the transactions contemplated
hereby (including, without limitation, the issuance and sale by the Company of
the Shares) will give rise to a right to terminate or accelerate the due date of
any payment due under, or conflict with or result in the breach of any term or
provision of, or constitute a default (or an event which with notice or lapse of
time or both would constitute a default) under, or require any consent or waiver
under, or result in the execution or imposition of any lien, charge or
encumbrance upon any properties or assets of the Company or any of its
subsidiaries pursuant to the terms of, any indenture, mortgage, deed of trust or
other agreement or instrument to which the Company or any of its subsidiaries is
a party or by which it or any of its properties or businesses is bound, or any
franchise, license, permit, judgment, decree, order, statute, rule or regulation
applicable to the Company or any of its subsidiaries or violate any provision of
the charter or by-laws of the Company or any of its subsidiaries, except for
such consents or waivers which have already been obtained and are in full force
and effect.
(l) The Company has an authorized and outstanding capital stock as
set forth under the caption "Capitalization" in the Prospectus. All of the
outstanding shares of Common Stock have been duly and validly issued and are
fully paid and nonassessable and none of them was issued in violation of any
preemptive or other similar right. The Shares, when issued and sold pursuant to
this Agreement, will be duly and validly issued, fully paid and nonassessable
and none of them will be issued in violation of any preemptive or other similar
right. Except as disclosed in the Registration Statements and the Prospectus,
and except for securities issued to employees in connection with the grant of
options to acquire the Company's Common Stock consistent with past practice and
securities issued in connection with the transactions with ▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
Corporation and Silicon Valley Communications, Inc., there is no outstanding
option, warrant or other right calling for the issuance of, and there is no
commitment, plan or arrangement to issue, any share of stock of the Company or
any
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security convertible into, or exercisable or exchangeable for, such stock. The
Common Stock and the Shares conform in all material respects to all statements
in relation thereto contained or incorporated by reference in the Registration
Statements and the Prospectus. All outstanding shares of capital stock of each
subsidiary have been duly authorized and validly issued, and are fully paid and
nonassessable and are owned directly by the Company or by another wholly-owned
subsidiary of the Company free and clear of any security interests, liens,
encumbrances, equities or claims, other than those described in the Prospectus.
(m) No holder of any security of the Company has the right to have
any security owned by such holder included in the Registration Statements or to
demand registration of any security owned by such holder during the period
ending 90 days after the date of this Agreement, except any such rights as may
have been duly waived. Each director and executive officer of the Company has
delivered to the Representatives his enforceable written agreement that he will
not, for a period of 90 days after the date of this Agreement, without the prior
written consent of CIBC World Markets Corp., on behalf of the Representatives,
offer for sale, sell, distribute, grant any option for the sale of, or otherwise
dispose of, directly or indirectly, or exercise any registration rights with
respect to, any shares of Common Stock (or any securities convertible into,
exercisable for, or exchangeable for any shares of Common Stock) owned by him
(each, a "Lock-Up Agreement").
(n) All necessary corporate action has been duly and validly taken by
the Company to authorize the execution, delivery and performance of this
Agreement and the issuance and sale of the Shares by the Company. This Agreement
has been duly and validly authorized, executed and delivered by the Company and
constitutes the legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except (A) as the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles and (B) to the extent that rights
to indemnity or contribution under this Agreement may be limited by Federal and
state securities laws or the public policy underlying such laws.
(o) Neither the Company nor any of its subsidiaries is involved in
any labor dispute nor, to the knowledge of the Company, is any such dispute
threatened, which dispute would have a material adverse effect on the assets or
properties, business, results of operations, prospects or condition (financial
or otherwise) of the Company and its subsidiaries taken as a whole.
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(p) No transaction has occurred between or among the Company or any
of its subsidiaries and any of its officers or directors or any affiliate or
affiliates of any such officer or director that is required to be described in
and is not described in the Registration Statements and the Prospectus.
(q) The Company has not taken, nor will it take, directly or
indirectly, any action designed to or which might reasonably be expected to
cause or result in, or which has constituted or which might reasonably be
expected to constitute, the stabilization or manipulation of the price of the
Common Stock to facilitate the sale or resale of any of the Shares.
(r) The Company and its subsidiaries has filed all Federal, state,
local and foreign tax returns which are required to be filed through the date
hereof, or has received extensions thereof, and has paid all taxes shown on such
returns and all assessments received by it to the extent that the same are
material and have become due. There are no tax audits or investigations pending,
which if adversely determined would have a material adverse effect on the
Company, its business, financial condition or results of operations; nor are
there any material proposed additional tax assessments against the Company and
any of its subsidiaries.
(s) The Shares have been duly authorized for quotation on the
National Association of Securities Dealers Automated Quotation ("Nasdaq")
National Market System.
(t) The Company is not and, after giving effect to the offering and
sale of the Shares and the application of the net proceeds therefrom as
described in the Prospectus, will not be, an "investment company" as defined in
the Investment Company Act of 1940.
(u) The Company has not distributed and, prior to the later of (i)
the Closing Date and (ii) the completion of the distribution of the Shares, will
not distribute any offering material in connection with the offering and sale of
the Shares other than the Registration Statement or any amendment thereto, any
Preliminary Prospectus or the Prospectus or any amendment or supplement thereto,
or other materials, if any permitted by the Act.
(v) The Company and C-COR Acquisition, Inc. have taken and fulfilled
any and all stockholder and other actions necessary to the completion and
consummation of the transactions contemplated by that certain Agreement and Plan
of Merger dated as of May 15, 1999 among C-COR Electronics, Inc., C-COR
Acquisition Corp. and ▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ Corporation and have successfully
completed the actions required of them thereunder.
(w) The Company and ▇-▇▇▇.▇▇▇ Acquisition Corp. have taken and
fulfilled any and all stockholder and other actions necessary to the completion
and consummation of the transactions contemplated by
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that certain Agreement and Plan of Merger dated as of July 13, 1999 among the
Company, ▇-▇▇▇.▇▇▇ Acquisition Corp. and Silicon Valley Communications, Inc. and
have successfully completed the actions required of them thereunder.
(x) Each approval, consent, order, authorization, designation,
declaration or filing of, by or with any regulatory, administrative or other
governmental body necessary in connection with the execution and delivery by the
Company of this Agreement and the consummation of the transactions herein
contemplated required to be obtained or performed by the Company (except such
additional steps as may be required by the National Association of Securities
Dealers, Inc. (the "NASD") or may be necessary to qualify the Shares for public
offering by the Underwriters under the state securities or Blue Sky laws) has
been obtained or made and is in full force and effect.
(y) There are no affiliations with the NASD among the Company's
officers, directors or, to the best of the knowledge of the Company, any five
percent or greater stockholder of the Company, except as set forth in the
Registration Statement or otherwise disclosed in writing to the
Representatives.
(z) Each of the Company and its subsidiaries is in compliance in all
material respects with all rules, laws and regulation relating to the use,
treatment, storage and disposal of toxic substances and protection of health or
the environment which are applicable to its business, except where such failure
to comply would not have a material adverse effect on the Company and its
subsidiaries taken as a whole.
(aa) The Company, its subsidiaries, or any other person associated
with or acting on behalf of the Company or its subsidiaries including, without
limitation, any director, officer, agent or employee of the Company or its
subsidiaries has not, directly or indirectly, while acting on behalf of the
Company or its subsidiaries (i) used any corporate funds for unlawful
contributions, gifts, entertainment or other unlawful expenses relating to
political activity; (ii) made any unlawful payment to foreign or domestic
government officials or employees or to foreign or domestic political parties or
campaigns from corporate funds; (iii) violated any provision of the Foreign
Corrupt Practices Act of 1977, as amended; or (iv) made any other unlawful
payment.
(bb) The Company has reviewed its operations and that of its
subsidiaries to evaluate the extent to which the business or operations of the
Company or any of its subsidiaries will be affected by the Year 2000 Problem
(that is, any significant risk that computer hardware or software applications
used by the Company and its subsidiaries will not, in the case of dates or time
periods occurring after December 31, 1999, function at least as effectively as
in the case of dates or time
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periods occurring prior to January 1, 2000); as a result of such review, (i) the
Company has no reason to believe, and does not believe, that (A) there are any
issues related to the Company's preparedness to address the Year 2000 Problem
that are of a character required to be described or referred to in the
Registration Statement or Prospectus which have not been accurately described in
the Registration Statement or Prospectus and (B) the Year 2000 Problem will have
a material adverse effect, or result in any material loss or interference with
the business or operations of the Company and its subsidiaries, taken as a
whole; and (ii) the Company reasonably believes, after due inquiry, that the
suppliers, vendors, customers or other material third parties used or served by
the Company and such subsidiaries are addressing or will address the Year 2000
Problem in a timely manner, except to the extent that a failure to address the
Year 2000 by a supplier, vendor, customer or material third party would not have
a material adverse effect on its business or financial condition.
5. Conditions of the Underwriters' Obligations. The obligations of the
-------------------------------------------
Underwriters under this Agreement are several and not joint. The respective
obligations of the Underwriters to purchase the Shares on each Closing Date are
subject to each of the following terms and conditions:
(a) The Prospectus shall have been timely filed with the Commission
in accordance with Section 6(A)(a) of this Agreement.
(b) No order preventing or suspending the use of any preliminary
prospectus or the Prospectus shall have been or shall be in effect and no order
suspending the effectiveness of the Registration Statement shall be in effect
and no proceedings for such purpose shall be pending before or threatened by the
Commission, and any requests for additional information on the part of the
Commission (to be included in the Registration Statement or the Prospectus or
otherwise) shall have been complied with to the satisfaction of the
Representatives.
(c) The representations and warranties of the Company contained in
this Agreement and in the certificates delivered pursuant to Section 5(d) shall
be true and correct when made and on and as of each Closing Date as if made on
such date and the Company shall have performed all covenants and agreements and
satisfied all the conditions contained in this Agreement required to be
performed or satisfied by it at or before such Closing Date.
(d) The Representatives shall have received on each Closing Date a
certificate, addressed to the Representatives and dated such Closing Date, of
the chief executive or chief operating officer and the chief financial officer
or chief accounting officer of the Company to the effect that the signers of
such certificate have carefully examined the Registration Statement, the
Prospectus and this Agreement and that the representations and warranties of the
Company in this Agreement are true and correct on and as of such Closing Date
with the same effect as if made on such Closing Date and the Company has
performed all covenants and agreements and satisfied all conditions contained in
this Agreement required to be performed or satisfied by it at or prior to such
Closing Date.
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(e) The Representatives shall have received on the Effective Time, at
the time this Agreement is executed and on each Closing Date a signed letter
from KPMG LLP addressed to the Representatives and dated, respectively, the
Effective Time, the date of this Agreement and each such Closing Date, in form
and substance reasonably satisfactory to the Representatives, confirming that
they are independent accountants within the meaning of the Securities Act and
the Rules that the response to Item 10 of the Registration Statement is correct
insofar as it relates to them and stating in effect that:
(A) in their opinion the audited financial statements and
financial statement schedules examined by them and included in the Registration
Statements and the Prospectus and reported on by them comply as to form in all
material respects with the applicable accounting requirements of the Securities
Act and the Rules.
(B) they have performed the procedures specified by the American
Institute of Certified Public Accountants for a review of interim financial
information as described in Statement of Auditing Standards No. 71, Interim
Financial Information, on the unaudited financial statements for the three
months ended September 24, 1999 and September 25, 1998 included in the
Registration Statements;
(C) on the basis of the review referred to in clause (B) above,
a reading of the latest available interim financial statements of the Company
and of the amounts included in the Registration Statement and the Prospectus
under the headings "Summary Financial Information" and "Selected Financial
Data," carrying out certain procedures (but not an examination in accordance
with generally accepted auditing standards) which would not necessarily reveal
matters of significance with respect to the comments set forth in such letter, a
reading of the minutes of the meetings of the stockholders and directors of the
Company, and inquiries of certain officials of the Company who have
responsibility for financial and accounting matters of the Company as to
transactions and events subsequent to the date of the latest audited financial
statements, except as disclosed in the Registration Statement and the
Prospectus, nothing came to their attention that caused them to believe that:
(I) the amounts in "Summary Consolidated Financial
Information," and "Selected Consolidated Financial Data" included in the
Registration Statements and the Prospectus do not agree with the corresponding
amounts in the audited and unaudited financial statements from which such
amounts were derived; or
(II) with respect to the Company, there were, at a
specified date not more than three business days prior to the date of the
letter, any increases in the current liabilities and long term liabilities of
the Company or any decreases in net income or in working capital or the
stockholders' equity in the Company, as compared with the amounts shown on the
Company's audited balance sheet for the fiscal year ended June 25, 1999 and the
three months ended September 24, 1999 included in the Registration Statement;
and
-13-
(D) they have performed certain other procedures as a result of
which they determined that certain information of an accounting, financial or
statistical nature (which is limited to accounting, financial or statistical
information derived from the general accounting records of the Company) set
forth in the Registration Statements and the Prospectus and reasonably specified
by the Representatives agrees with the accounting records of the Company.
(E) based upon the procedures set forth in clauses (B) and (C)
above and a reading of the amounts included in the Registration Statement under
the headings "Summary Financial and Other Data" and "Selected Financial Data"
included in the Registration Statement and Prospectus and a reading of the
financial statements from which certain of such data were derived, nothing has
come to their attention that gives them reason to believe that the "Summary
Financial and Other Data" and "Selected Financial Data" included in the
Registration Statement and Prospectus do not comply as to the form in all
material respects with the applicable accounting requirements of the Securities
Act and the Rules or that the information set forth therein is not fairly stated
in relation to the financial statements included in the Registration Statement
or Prospectus from which certain of such data were derived are not in conformity
with generally accepted accounting principles applied on a basis substantially
consistent with that of the audited financial statements included in the
Registration Statement and Prospectus.
References to the Registration Statement and the Prospectus in this paragraph
(e) are to such documents as amended and supplemented at the date of the letter.
For purposes of this subsection, (i) if the Effective Time of the Initial
Registration Statement is subsequent to the execution and delivery of this
Agreement, "Registration Statements" shall mean the initial registration
statement as proposed to be amended by the amendment or post-effective amendment
to be filed shortly prior to its Effective Time, (ii) if the Effective Time of
the Initial Registration Statement is prior to the execution and delivery of
this Agreement but the Effective Time of the Additional Registration Statement
is subsequent to such execution and delivery, "Registration Statements" shall
mean the Initial Registration Statement and the additional registration
statement as proposed to be filed or as proposed to be amended by the post-
effective amendment to be filed shortly prior to its Effective Time, and (iii)
"Prospectus" shall mean the prospectus included in the Registration Statements.
All financial statements and schedules included in material incorporated by
reference into the Prospectus shall be deemed included in the Registration
Statements for purposes of this subsection.
(f) The Representatives shall have received on each Closing Date from
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP, counsel for the Company, an opinion,
addressed to the Representatives and dated such Closing Date, and stating in
effect that:
(i) The Company has been duly organized and is validly existing
as a corporation in good standing under the laws of Pennsylvania. The Company is
duly qualified and in good standing as a foreign corporation in each
jurisdiction in which
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the character or location of its assets or properties (owned, leased or
licensed) or the nature of its businesses makes such qualification necessary,
except for such jurisdictions where the failure to so qualify would not have a
material adverse effect on the assets or properties, business, results of
operations, prospects or condition (financial or otherwise) of the Company.
(ii) The Company has all requisite corporate power and authority
to own, lease and license its assets and properties and conduct its business as
now being conducted and as described in the Registration Statements and the
Prospectus; and the Company has all requisite corporate power and authority and
all necessary authorizations, approvals, consents, orders, licenses,
certificates and permits to enter into, deliver and perform this Agreement and
to issue and sell the Shares.
(iii) The Company has authorized and issued capital stock as set
forth in the Registration Statements and the Prospectus; the certificates
evidencing the Shares are in due and proper legal form and have been duly
authorized for issuance by the Company; all of the outstanding shares of Common
Stock of the Company have been duly and validly authorized and have been duly
and validly issued and are fully paid and nonassessable and none of them was
issued in violation of any preemptive or other similar right. The Shares when
issued and sold pursuant to this Agreement, will be duly and validly issued,
outstanding, fully paid and nonassessable and none of them will have been issued
in violation of any preemptive or other similar right. To such counsel's
knowledge, except as disclosed in the Registration Statements and the
Prospectus, there is no outstanding option, warrant or other right calling for
the issuance of, and no commitment, plan or arrangement to issue, any share of
stock of the Company or any security convertible into, exercisable for, or
exchangeable for stock of the Company. The Common Stock and the Shares conform
in all material respects to the descriptions thereof contained in the
Registration Statements and the Prospectus.
(iv) All necessary corporate action has been duly and validly
taken by the Company to authorize the execution, delivery and performance of
this Agreement and the issuance and sale of the Shares. This Agreement has been
duly and validly authorized, executed and delivered by the Company.
(v) Neither the execution, delivery and performance of this
Agreement by the Company nor the consummation of any of the transactions
contemplated hereby (including, without limitation, the issuance and sale by the
Company of the Shares) will violate any provision of the charter or by-laws of
the Company or any of its subsidiaries or give rise to a right to terminate or
accelerate the due date of any payment due under, or conflict with or result in
the breach of any term or provision of, or constitute a default (or any event
which with notice or lapse of time, or both, would constitute a default) under,
or require any consent or waiver under, or result in the execution or imposition
of any lien, charge or encumbrance upon any properties or assets of the Company
or any of its subsidiaries pursuant to the terms of any indenture, mortgage,
deed of trust, note or other agreement or instrument of which such counsel is
aware and to which the Company or any of its subsidiaries is a party or by
-15-
which it or any of its properties or businesses is bound, or any franchise,
license, permit, judgment, decree, order, statute, rule or regulation of which
such counsel is aware.
(vi) No consent, approval, authorization or order of any court
or governmental agency or body is required for the performance of this Agreement
by the Company or the consummation of the transactions contemplated hereby or
thereby, except such as have been obtained under the Securities Act and such as
may be required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Shares by the several Underwriters.
(vii) To such counsel's knowledge, there is no litigation or
governmental or other proceeding or investigation, before any court or before or
by any public body or board pending or threatened against, or involving the
assets, properties or businesses of, the Company or any of its subsidiaries
which would have a material adverse effect upon the assets or properties,
business, results of operations, prospects or condition (financial or otherwise)
of the Company and its subsidiaries taken as a whole.
(viii) The statements in the Prospectus in Item 15 of the
Registration Statement, insofar as such statements constitute a summary of
documents referred to therein or matters of law, are fair summaries in all
material respects and accurately present the information called for with respect
to such documents and matters. Accurate copies of all contracts and other
documents required to be filed as exhibits to, or described in, each
Registration Statement have been so filed with the Commission or are fairly
described in such Registration Statement, as the case may be.
(ix) Each Registration Statement, all preliminary prospectuses
and the Prospectus and each amendment or supplement thereto (except for the
financial statements and schedules and other financial and statistical data
included therein, as to which such counsel expresses no opinion) comply as to
form in all material respects with the requirements of the Securities Act and
the Rules.
(x) Each Registration Statement has become effective under
the Securities Act, and to such counsel's knowledge, no stop order suspending
the effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or are threatened, pending or
contemplated.
(xi) The capital stock of the Company conforms in all material
respects to the description thereof contained in the Prospectus under the
caption "Description of Capital Stock."
(xii) The Company is not 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.
-16-
To the extent deemed advisable by such counsel, they may rely as to matters
of fact on certificates of responsible officers of the Company and public
officials and on the opinions of other counsel satisfactory to the
Representatives as to matters which are governed by laws other than the laws of
the Commonwealth of Pennsylvania and the Federal laws of the United States;
provided that such counsel shall state that in their opinion the Underwriters
and they are justified in relying on such other opinions. Copies of such
certificates and other opinions shall be furnished to the Representatives and
counsel for the Underwriters.
In addition, such counsel shall state that such counsel has participated in
conferences with officers and other representatives of the Company,
representatives of the Representatives and representatives of the independent
certified public accountants of the Company, at which conferences the contents
of the Registration Statement and the 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 the Prospectus (except as specified
in the foregoing opinion), on the basis of the foregoing, no facts have come to
the attention of such counsel which lead such counsel to believe that any
Registration Statement at the time it became effective (except with respect to
the financial statements and notes and schedules thereto and other financial
data, as to which such counsel need express no belief) 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 not misleading, or
that the Prospectus as amended or supplemented (except with respect to the
financial statements and notes schedules thereto and other financial data, as to
which such counsel need make no statement) on the date thereof contained any
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(g) All proceedings taken in connection with the sale of the Firm
Shares and the Option Shares as herein contemplated shall be reasonably
satisfactory in form and substance to the Representatives and their counsel and
the Underwriters shall have received from ▇▇▇▇ and ▇▇▇▇ LLP a favorable opinion,
addressed to the Representatives and dated such Closing Date, with respect to
the Shares, the Registration Statement and the Prospectus, and such other
related matters, as the Representatives may reasonably request, and the Company
shall have furnished to ▇▇▇▇ and ▇▇▇▇ LLP such documents as they may reasonably
request for the purpose of enabling them to pass upon such matters.
(h) The Representatives shall have received copies of the Lock-up
Agreements executed by each entity or person described in Section 4(n).
(i) The Company shall have furnished or caused to be furnished to the
Representatives such further certificates or documents as the Representatives
shall have reasonably requested.
-17-
6. Covenants of the Company.
------------------------
(A) The Company covenants and agrees as follows:
(a) The Company shall prepare the Prospectus in a form approved
by the Representatives and file such Prospectus pursuant to Rule 424(b) under
the Securities 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
Securities Act, and shall promptly advise the Representatives (i) when any
amendment to the Registration Statement shall have become effective, (ii) of any
request by the Commission for any amendment of the Registration Statement or the
Prospectus or for any additional information, (iii) of the prevention or
suspension of the use of any preliminary prospectus or the Prospectus or of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or the institution or threatening of any proceeding for
that purpose and (iv) 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. Other than with respect to the Company's reporting requirements under
the Securities Exchange Act of 1934, as amended, the Company shall not file any
amendment of the Registration Statement or supplement to the Prospectus unless
the Company has furnished the Representatives a copy for its review prior to
filing and shall not file any such proposed amendment or supplement to which the
Representatives reasonably object. The Company shall use its best efforts to
prevent the issuance of any such stop order and, if issued, to obtain as soon as
possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Shares is
required to be delivered under the Securities Act and the Rules, any event
occurs as a result of which the Prospectus as then amended or supplemented would
include any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein in the light of the circumstances
under which they were made not misleading, or if it shall be necessary to amend
or supplement the Prospectus to comply with the Securities Act or the Rules, the
Company promptly shall prepare and file with the Commission, subject to the
second sentence of paragraph (a) of this Section 6(A), an amendment or
supplement which shall correct such statement or omission or an amendment which
shall effect such compliance.
(c) The Company shall make generally available to its security
holders and to the Representatives as soon as practicable, but not later than 45
days after the end of the 12-month period beginning at the end of the fiscal
quarter of the Company during which the Effective Time occurs (or 90 days if
such 12-month period coincides with the Company's fiscal year), an earnings
statement (which need not be audited) of the Company, covering such 12-month
period, which shall satisfy the provisions of Section 11(a) of the Securities
Act.
-18-
(d) The Company shall furnish to the Representatives and counsel
for the Underwriters, without charge, signed copies of the Registration
Statements (including all exhibits thereto and amendments thereof) and to each
other Underwriter a copy of the Registration Statements (without exhibits
thereto) and all amendments thereof and, so long as delivery of a prospectus by
an Underwriter or dealer may be required by the Securities Act or the Rules, as
many copies of the Preliminary Prospectus and the Prospectus and any amendments
thereof and supplements thereto as the Representatives may reasonably request.
(e) The Company shall cooperate with the Representatives and
their counsel in endeavoring to qualify the Shares for offer and sale under the
laws of such jurisdictions as the Representatives may designate and shall
maintain such qualifications in effect so long as required for the distribution
of the Shares; provided, however, that the Company shall not be required in
connection therewith, as a condition thereof, to qualify as a foreign
corporation or to execute a general consent to service of process in any
jurisdiction or subject itself to taxation as doing business in any
jurisdiction.
(f) For a period of five years after the date of this Agreement,
the Company shall supply to the Representatives, and to each other Underwriter
who may so request in writing, copies of such financial statements and other
periodic and special reports as the Company may from time to time distribute
generally to the holders of any class of its capital stock and to furnish to the
Representatives a copy of each annual or other report it shall be required to
file with the Commission.
(g) Without the prior written consent of CIBC World Markets
Corp., on behalf of the Representatives, for a period of 90 days after the date
of this Agreement, the Company shall not issue, sell or register with the
Commission (other than on Form S-8 or on any successor form or on Form S-3 with
respect to shares of the Company's capital stock issued, or to be issued, by the
Company in connection with its acquisition of Silicon Valley Communications,
Inc.), or otherwise dispose of, directly or indirectly, any equity securities of
the Company (or any securities convertible into or exercisable or exchangeable
for equity securities of the Company), except for the issuance of the Shares
pursuant to the Registration Statement and the issuance of shares pursuant to
the Company's existing stock option plan or bonus plan.
(h) On or before completion of this offering, the Company shall
make all filings required under applicable securities laws and by the Nasdaq
National Market System (including any required registration under the Exchange
Act).
(B) The Company agrees to pay, or reimburse if paid by the
Representatives, whether or not the transactions contemplated hereby are
consummated or this Agreement is terminated, all costs and expenses incident to
the public offering of the Shares and the performance of the obligations of the
Company under this Agreement including those relating to: (i) the preparation,
printing, filing and distribution of the Registration Statements including all
exhibits thereto, each preliminary prospectus, the Prospectus, all amendments
and supplements to the Registration Statements
-19-
and the Prospectus, and the printing, filing and distribution of this Agreement;
(ii) the preparation and delivery of certificates for the Shares to the
Underwriters; (iii) the registration or qualification of the Shares for offer
and sale under the securities or Blue Sky laws of the various jurisdictions
referred to in Section 6(A)(e), including the reasonable fees and disbursements
of counsel for the Underwriters in connection with such registration and
qualification and the preparation, printing, distribution and shipment of
preliminary and supplementary Blue Sky memoranda; (iv) the furnishing (including
costs of shipping and mailing) to the Representatives and to the Underwriters of
copies of each preliminary prospectus, the Prospectus and all amendments or
supplements to the Prospectus, and of the several documents required by this
Section to be so furnished, as may be reasonably requested for use in connection
with the offering and sale of the Shares by the Underwriters or by dealers to
whom Shares may be sold; (v) the filing fees of the National Association of
Securities Dealers, Inc. in connection with its review of the terms of the
public offering; (vi) the furnishing (including costs of shipping and mailing)
to the Representatives and to the Underwriters of copies of all reports and
information required by Section 6(A)(f); (vii) inclusion of the Shares for
quotation on the Nasdaq National Market System; and (viii) all transfer taxes,
if any, with respect to the sale and delivery of the Shares by the Company to
the Underwriters. Subject to the provisions of Section 9, the Underwriters agree
to pay, whether or not the transactions contemplated hereby are consummated or
this Agreement is terminated, all costs and expenses incident to the performance
of the obligations of the Underwriters under this Agreement not payable by the
Company pursuant to the preceding sentence, including, without limitation, the
fees and disbursements of counsel for the Underwriters.
7. Indemnification.
---------------
(a) The Company agrees to indemnify and hold harmless each Underwriter
and each person, if any, who controls any Underwriter within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act against any
and all losses, claims, damages and liabilities, joint or several (including any
reasonable investigation, legal and other expenses incurred in connection with,
and any amount paid in settlement of, any action, suit or proceeding or any
claim asserted), to which they, or any of them, may become subject under the
Securities Act, the Exchange Act or other Federal or state law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or liabilities
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in (i) any Registration Statement, or arise out of
or are based upon any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading or (ii) in the Preliminary Prospectus or the Prospectus or arise
out of or are based upon any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, provided, however, that (1) such indemnity shall not inure to the
benefit of any Underwriter (or any person controlling such Underwriter) on
account of any losses, claims, damages or liabilities arising from the sale of
the Shares to any person by such Underwriter if such untrue statement or
omission or alleged untrue statement or omission was made in such preliminary
prospectus, such Registration Statement or the Prospectus, or such amendment or
supplement, in reliance upon and in
-20-
conformity with information furnished in writing to the Company by the
Representatives on behalf of any Underwriter specifically for use therein and
(2) the indemnity agreement contained in this paragraph (a) with respect to any
Preliminary Prospectus shall not inure to the benefit of any Underwriter from
whom the person asserting any such losses, claims, damages, liabilities or
expenses purchased the Shares which is the subject thereof (or to the benefit of
any person controlling such Underwriter) if at or prior to the written
confirmation of the sale of such Shares a copy of the Prospectus (or the
Prospectus as amended or supplemented) was not sent or delivered to such person
and the untrue statement or omission of a material fact contained in such
Preliminary Prospectus was corrected in the Prospectus (or the Prospectus as
amended or supplemented) unless such failure is the result of noncompliance by
the Company with Section 6(A) hereof. This indemnity agreement will be in
addition to any liability which the Company may otherwise have.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company and each person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, each director of the Company and each officer of the Company who
signs any Registration Statement, to the same extent as the foregoing indemnity
from the Company to each Underwriter, but only insofar as such losses, claims,
damages or liabilities arise out of or are based upon an untrue statement or
omission or alleged untrue statement or omission which was made in the
Preliminary Prospectus, such Registration Statement or the Prospectus, or any
amendment thereof or supplement thereto, and was contained in the third
paragraph under the caption "Underwriting" in the Prospectus; provided, however,
that the obligation of each Underwriter to indemnify the Company (including any
controlling person, director or officer thereof) shall be limited to the net
proceeds received by the Company from such Underwriter.
(c) Any party that proposes to assert the right to be indemnified
under this Section will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim is to
be made against an indemnifying party or parties under this Section, notify each
such indemnifying party of the commencement of such action, suit or proceeding,
enclosing a copy of all papers served. No indemnification provided for in
Section 7(a) or 7(b) or contribution provided for in Section 8 shall be
available to any party who shall fail to give notice as provided in this Section
7(c) if the party to whom notice was not given was unaware of the proceeding to
which such notice would have related and was prejudiced by the failure to give
such notice but the omission so to notify such indemnifying party of any such
action, suit or proceeding shall not relieve it from any liability that it may
have to any indemnified party for contribution or otherwise than under this
Section. In case any such action, suit or proceeding 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
in, 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, and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense thereof
and the approval by the indemnified party of such counsel, the
-21-
indemnifying party shall not be liable to such indemnified party for any legal
or other expenses, except as provided below and except for the reasonable costs
of investigation subsequently incurred by such indemnified party in connection
with the defense thereof. The indemnified party shall have the right to employ
its counsel in any such action, but the fees and expenses of such counsel shall
be at the expense of such indemnified party unless (i) the employment of counsel
by such indemnified party has been authorized in writing by the indemnifying
parties, (ii) the indemnified party shall have reasonably concluded that there
may be a conflict of interest between the indemnifying parties and the
indemnified party in the conduct of the defense of such action (in which case
the indemnifying parties shall not have the right to direct the defense of such
action on behalf of the indemnified party) or (iii) the indemnifying parties
shall not have employed counsel to assume the defense of such action within a
reasonable time after notice of the commencement thereof, in each of which cases
the fees and expenses of counsel shall be at the expense of the indemnifying
parties. An indemnifying party shall not be liable for any settlement of any
action, suit, proceeding or claim effected without its written consent.
8. Contribution. In order to provide for just and equitable contribution
------------
in circumstances in which the indemnification provided for in Section 7(a) is
due in accordance with its terms but for any reason is held to be unavailable
from the Company, the Company and the Underwriters shall contribute to the
aggregate losses, claims, damages and liabilities (including any investigation,
legal and other expenses reasonably incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claims asserted,
but after deducting any contribution received by the Company from persons other
than the Underwriters, such as persons who control the Company within the
meaning of the Securities Act, officers of the Company who signed any
Registration Statement and directors of the Company, who may also be liable for
contribution) to which the Company and one or more of the Underwriters may be
subject in such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and the Underwriters on the other from
the offering of the Shares or, if such allocation is not permitted by applicable
law or indemnification is not available as a result of the indemnifying party
not having received notice as provided in Section 7 hereof, in such proportion
as is appropriate to reflect not only the relative benefits referred to above
but also the relative fault of the Company on the one hand and the Underwriters
on the other in connection with the statements or omissions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative benefits received by the
Company and the Underwriters shall be deemed to be in the same proportion as (x)
the total proceeds from the offering (net of underwriting discounts but before
deducting expenses) received by the Company, as set forth in the table on the
cover page of the Prospectus, bear to (y) the underwriting discounts received by
the Underwriters, as set forth in the table on the cover page of the Prospectus.
The relative fault of the Company or the Underwriters shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or alleged omission to state a material fact related to
information supplied by the Company or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this Section 8
were determined by pro rata allocation (even if the Underwriters were treated as
one entity
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for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to above. Notwithstanding the
provisions of this Section 8, (i) in no case shall any Underwriter (except as
may be provided in the Agreement Among Underwriters) be liable or responsible
for any amount in excess of the underwriting discount applicable to the Shares
purchased by such Underwriter hereunder, and (ii) the Company shall be liable
and responsible for any amount in excess of such underwriting discount;
provided, however, that 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. For purposes of this Section 8, each person, if any, who
controls an Underwriter within the meaning of Section 15 of the Securities Act
or Section 20(a) of the Exchange Act shall have the same rights to contribution
as such Underwriter, and each person, if any, who controls the Company within
the meaning of the Section 15 of the Securities Act or Section 20(a) of the
Exchange Act, each officer of the Company who shall have signed any Registration
Statement and each director of the Company shall have the same rights to
contribution as the Company, subject in each case to clauses (i) and (ii) in the
immediately preceding sentence of this Section 8. Any party entitled to
contribution will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim for
contribution may be made against another party or parties under this Section,
notify such party or parties from whom contribution may be sought, but the
omission so to notify such party or parties from whom contribution may be sought
shall not relieve the party or parties from whom contribution may be sought from
any other obligation it or they may have hereunder or otherwise than under this
Section. Upon notification to the contributing party of the commencement
thereof, the contributing party shall be entitled to participate in, and to the
extent that it shall wish, jointly with any other contributing party, to assume
the defense thereof, with counsel reasonably satisfactory to such contributing
party, and after notice from the contributing party to such party seeking
contribution of its election so to assume the defense thereof and the approval
by the party seeking contribution of such counsel, the contributing party shall
not be liable to such party seeking contribution for any legal or other
expenses, except as provided below and except for the reasonable costs of
investigation subsequently incurred by such party seeking contribution in
connection with the defense thereof. The party seeking contribution shall have
the right to employ its counsel in any such action, but the fees and expenses of
such counsel shall be at the expense of such party unless (i) the employment of
counsel by such party has been authorized in writing by the contributing
parties, (ii) the party seeking contribution shall have reasonably concluded
that there may be a conflict of interest between the contributing parties and
the party seeking contribution in the conduct of the defense of such action (in
which case the contributing parties shall not have the right to direct the
defense of such action on behalf of the party seeking contribution) or (iii) the
contributing parties shall not have employed counsel to assume the defense of
such action within a reasonable time after notice of the commencement thereof,
in each of which cases the fees and expenses of counsel shall be at the expense
of the contributing parties. No party shall be liable for contribution with
respect to any action, suit, proceeding or claim settled without its written
consent. The Underwriters' obligations to contribute pursuant to this Section 8
are several in proportion to their respective underwriting commitments and not
joint.
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9. Termination. This Agreement may be terminated with respect to the
-----------
Shares to be purchased on a Closing Date by the Representatives by notifying the
Company at any time
(a) in the absolute discretion of the Representatives at or before any
Closing Date: (i) if there shall have occurred any change, or any development or
event involving a prospective change, in the condition (financial or other),
business, properties or results of operation of the Company and its subsidiaries
taken as a whole which, in the judgment of the Representatives, is material and
adverse and makes it impractical or inadvisable to proceed with completion of
the public offering or the sale of and payment for the Shares; (ii) if on or
prior to such date, any domestic or international event or act or occurrence has
materially disrupted, or in the opinion of the Representatives will in the
future materially disrupt, the securities markets; (iii) if there has occurred
any new outbreak or material escalation of hostilities or other calamity or
crisis the effect of which on the financial markets of the United States is such
as to make it, in the judgment of the Representatives, inadvisable to proceed
with the offering; (iv) if there shall be such a material adverse change in
general financial, political or economic conditions or the effect of
international conditions on the financial markets in the United States is such
as to make it, in the judgment of the Representatives, inadvisable or
impracticable to market the Shares; (v) if trading in the Shares has been
suspended by the Commission or trading generally on the New York Stock Exchange,
Inc. or on the Nasdaq American Stock Market Exchange, Inc. has been suspended or
limited, or minimum or maximum ranges for prices for securities shall have been
fixed, or maximum ranges for prices for securities have been required, by said
exchanges or by order of the Commission, the National Association of Securities
Dealers, Inc., or any other governmental or regulatory authority; or (vi) if a
banking moratorium has been declared by any state or Federal authority, or
(b) at or before any Closing Date, that any of the conditions
specified in Section 5 shall not have been fulfilled when and as required by
this Agreement.
If this Agreement is terminated pursuant to any of its provisions, the
Company shall not be under any liability to any Underwriter, and no Underwriter
shall be under any liability to the Company, except that (y) if this Agreement
is terminated by the Representatives or the Underwriters because of any failure,
refusal or inability on the part of the Company to comply with the terms or to
fulfill any of the conditions of this Agreement, the Company will reimburse the
Underwriters for all out-of-pocket expenses (including the reasonable fees and
disbursements of their counsel) incurred by them in connection with the proposed
purchase and sale of the Shares or in contemplation of performing their
obligations hereunder and (z) no Underwriter who shall have failed or refused to
purchase the Shares agreed to be purchased by it under this Agreement, without
some reason sufficient hereunder to justify cancellation or termination of its
obligations under this Agreement, shall be relieved of liability to the Company
or to the other Underwriters for damages occasioned by its failure or refusal.
10. Substitution of Underwriters. If one or more of the Underwriters
----------------------------
shall fail (other than for a reason sufficient to justify the cancellation or
termination of this Agreement under Section 9) to purchase on any Closing Date
the Shares agreed to be purchased on such Closing Date by such
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Underwriter or Underwriters, the Representatives may find one or more substitute
underwriters to purchase such Shares or make such other arrangements as the
Representatives may deem advisable or one or more of the remaining Underwriters
may agree to purchase such Shares in such proportions as may be approved by the
Representatives, in each case upon the terms set forth in this Agreement. If no
such arrangements have been made by the close of business on the business day
following such Closing Date,
(a) if the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date shall not exceed 10% of the Shares that all
the Underwriters are obligated to purchase on such Closing Date, then each of
the nondefaulting Underwriters shall be obligated to purchase such Shares on the
terms herein set forth in proportion to their respective obligations hereunder;
provided, that in no event shall the maximum number of Shares that any
Underwriter has agreed to purchase pursuant to Section 1 be increased pursuant
to this Section 10 by more than 10% of such number of Shares without the written
consent of such Underwriter, or
(b) if the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date shall exceed 10% of the Shares that all the
Underwriters are obligated to purchase on such Closing Date, then the Company
shall be entitled to an additional business day within which it may, but is not
obligated to, find one or more substitute underwriters reasonably satisfactory
to the Representatives to purchase such Shares upon the terms set forth in this
Agreement.
In any such case, either the Representatives or the Company shall have the
right to postpone the applicable Closing Date for a period of not more than five
business days in order that necessary changes and arrangements (including any
necessary amendments or supplements to the Registration Statements or
Prospectus) may be effected by the Representatives and the Company. If the
number of Shares to be purchased on such Closing Date by such defaulting
Underwriter or Underwriters shall exceed 10% of the Shares that all the
Underwriters are obligated to purchase on such Closing Date, and none of the
nondefaulting Underwriters or the Company shall make arrangements pursuant to
this Section within the period stated for the purchase of the Shares that the
defaulting Underwriters agreed to purchase, this Agreement shall terminate with
respect to the Shares to be purchased on such Closing Date without liability on
the part of any nondefaulting Underwriter to the Company and without liability
on the part of the Company, except in both cases as provided in Sections 6(B),
7, 8 and 9. The provisions of this Section shall not in any way affect the
liability of any defaulting Underwriter to the Company or the nondefaulting
Underwriters arising out of such default. A substitute underwriter hereunder
shall become an Underwriter for all purposes of this Agreement.
11. Miscellaneous. The respective agreements, representations,
-------------
warranties, indemnities and other statements of the Company or its officers and
of the Underwriters set forth in or made pursuant to this Agreement shall remain
in full force and effect, regardless of any investigation made by or on behalf
of any Underwriter or the Company or any of the officers, directors or
controlling persons
-25-
referred to in Sections 7 and 8 hereof, and shall survive delivery of and
payment for the Shares. The provisions of Sections 6(B), 7, 8 and 9 shall
survive the termination or cancellation of this Agreement.
This Agreement has been and is made for the benefit of the Underwriters,
the Company and their respective successors and assigns, and, to the extent
expressed herein, for the benefit of persons controlling any of the
Underwriters, or the Company, and directors and officers of the Company, and
their respective successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. The term "successors and
assigns" shall not include any purchaser of Shares from any Underwriter merely
because of such purchase.
All notices and communications hereunder shall be in writing and mailed or
delivered or by telephone or telegraph if subsequently confirmed in writing, (a)
if to the Representatives, c/o CIBC World Markets Corp., ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
and (b) if to the Company, to its agent for service as such agent's address
appears on the cover page of the Initial Registration Statement.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York without regard to principles of conflict of laws.
This Agreement may be signed in any number of counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument.
[Remainder of page intentionally left blank.]
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Please confirm that the foregoing correctly sets forth the agreement among
us.
Very truly yours,
▇-▇▇▇.▇▇▇ CORP.
By: _________________________________
Name:
Title:
Confirmed:
CIBC WORLD MARKETS CORP.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, INC.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ READ
JOSEPHTHAL & CO., INC.
Acting severally on behalf of itself
and as representative of the several
Underwriters named in Schedule I annexed
hereto.
By: CIBC WORLD MARKETS CORP.
By: _________________________________________
Title:
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SCHEDULE I
Number of
Firm Shares to
Name Be Purchased
---- ------------
CIBC World Markets Corp.
▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇, Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Read
Josephthal & Co., Inc.
_______________
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