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SAFEGUARD SCIENTIFICS, INC.
(a Pennsylvania corporation)
10,000,000 Shares of Common Stock
PURCHASE AGREEMENT
Dated: April [5], 2000
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TABLE OF CONTENTS
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SECTION 1. Representations and Warranties..................................................... 3
(a) Representations and Warranties by the Company....................... 3
(i) Compliance with Registration Requirements.................. 3
(ii) Incorporated Documents..................................... 4
(iii) Independent Accountants.................................... 4
(iv) Financial Statements....................................... 4
(v) No Material Adverse Change in Business..................... 5
(vi) Good Standing of the Company............................... 5
(vii) Good Standing of Subsidiaries and Material
Holdings................................................... 6
(viii) Capitalization............................................. 6
(ix) Authorization of Agreement................................. 7
(x) Authorization and Description of Securities................ 7
(xi) Absence of Defaults and Conflicts.......................... 7
(xii) Absence of Labor Dispute................................... 8
(xiii) Absence of Proceedings..................................... 8
(xiv) Accuracy of Exhibits....................................... 9
(xv) Possession of Intellectual Property........................ 9
(xvi) Absence of Further Requirements............................ 9
(xvii) Possession of Licenses and Permits......................... 9
(xviii) Title to Property.......................................... 10
(xix) Investment Company Act..................................... 10
(xx) Environmental Laws......................................... 11
(xxi) Year 2000.................................................. 11
(b) Officers' Certificates.............................................. 12
SECTION 2. Sale and Delivery to Underwriters; Closing......................................... 12
(a) Initial Securities.................................................. 12
(b) Option Securities................................................... 12
(c) Payment............................................................. 13
(d) Denominations; Registration......................................... 13
SECTION 3. Covenants of the Company........................................................... 14
(a) Compliance with Securities Regulations and Commission
Requests............................................................ 14
(b) Filing of Amendments................................................ 14
(c) Delivery of Registration Statements................................. 14
(d) Delivery of Prospectuses............................................ 15
(e) Continued Compliance with Securities Laws........................... 15
(f) Blue Sky Qualifications............................................. 15
(g) Rule 158............................................................ 16
(h) Use of Proceeds..................................................... 16
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(i) Listing............................................................. 16
(j) Restriction on Sale of Securities................................... 16
(k) Reporting Requirements.............................................. 17
SECTION 4. Payment of Expenses................................................................ 17
(a) Expenses............................................................ 17
(b) Termination of Agreement............................................ 17
SECTION 5. Conditions of Underwriters' Obligations............................................ 18
(a) Effectiveness of Registration Statement............................. 18
(b) Opinion of Counsel for Company...................................... 18
(c) Opinion of Counsel for Underwriters................................. 18
(d) Officers' Certificate............................................... 19
(e) Accountant's Comfort Letters........................................ 19
(f) Bring-down Comfort Letter........................................... 19
(g) Approval of Listing................................................. 20
(h) No Objection........................................................ 20
(i) Lock-up Agreements.................................................. 20
(j) Conditions to Purchase of Option Securities......................... 20
(i) Officers' Certificate...................................... 20
(ii) Opinion of Counsel for Company............................. 20
(iii) Opinion of Special 1940 Act Counsel for the
Company.................................................... 20
(iv) Opinion of Counsel for Underwriters........................ 21
(v) Bring-down Comfort Letter.................................. 21
(k) Additional Documents................................................ 21
(l) Termination of Agreement............................................ 21
SECTION 6. Indemnification.................................................................... 21
(a) Indemnification of Underwriters..................................... 21
(b) Indemnification of Company, Directors and Officers.................. 23
(c) Actions against Parties; Notification............................... 23
SECTION 7. Contribution....................................................................... 24
SECTION 8. Representations, Warranties and Agreements to
Survive Delivery...................................................................... 25
SECTION 9. Termination of Agreement........................................................... 26
(a) Termination; General................................................ 26
(b) Liabilities......................................................... 26
SECTION 10. Default by One or More of the Underwriters........................................ 26
SECTION 11. Notices........................................................................... 27
SECTION 12. Parties........................................................................... 27
SECTION 13. Governing Law and Time............................................................ 28
SECTION 14. Effect of Headings................................................................ 28
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SCHEDULES
Schedule A - List of Underwriters Sch A-1
Schedule B - List of Material Holdings Sch B-1
Schedule C - Pricing Information Sch C-1
Schedule D - List of Persons subject to Lock-up Sch D-1
EXHIBITS
Exhibit A - Form of Opinion of Company's Counsel A-1
Exhibit B - Form of Opinion of General Counsel of the Company B-1
Exhibit C - Form of Opinion of Special 1940 Act Counsel to the Company C-1
Exhibit D - Form of Lock-up Letter D-1
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SAFEGUARD SCIENTIFICS, INC.
10,000,000 SHARES OF COMMON STOCK
PURCHASE AGREEMENT
April [5], 2000
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
Deutsche Bank Securities Inc.
▇▇▇▇▇▇ Brothers Inc.
Prudential Securities Incorporated
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc.
as Representatives of the several Underwriters
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
Safeguard Scientifics, Inc., a Pennsylvania corporation (the
"COMPANY"), confirms its agreement with ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch,
Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇") and each of the other
Underwriters named in Schedule A hereto (collectively, the "UNDERWRITERS", which
term shall also include any underwriter substituted as hereinafter provided in
Section 10 hereof), for whom ▇▇▇▇▇▇▇ ▇▇▇▇▇, Deutsche Bank Securities Inc.,
▇▇▇▇▇▇ Brothers Inc., Prudential Securities Incorporated, ▇.▇. ▇▇▇▇▇▇ Securities
Inc. and ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc. are acting as Representatives (in such
capacity, the "REPRESENTATIVES"), with respect to the issue and sale by the
Company and the purchase by the Underwriters, acting severally and not jointly,
of the respective numbers of shares of Common Stock, par value $.10 per share,
of the Company ("COMMON STOCK") set forth in said Schedule A, and with respect
to the grant by the Company to the Underwriters, acting severally and not
jointly, of the option described in Section 2(b) hereof to purchase all or any
part of 1,500,000 additional shares of Common Stock to cover over-allotments, if
any. The aforesaid 10,000,000 shares of Common Stock (the "INITIAL SECURITIES")
to be purchased by the Underwriters and all or any part of the 1,500,000 shares
of
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Common Stock subject to the option described in Section 2(b) hereof (the "OPTION
SECURITIES") are hereinafter called, collectively, the "SECURITIES."
The Company understands that the Underwriters propose to make a public
offering of the Securities as soon as the Representatives deem advisable after
this Agreement has been executed and delivered.
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement on Form S-3 (No. 333- 31296) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 ACT"), including the related preliminary prospectus or prospectuses.
Promptly after execution and delivery of this Agreement, the Company will
prepare and file a prospectus in accordance with the provisions of Rule 430A
("RULE 430A") of the rules and regulations of the Commission under the 1933 Act
(the "1933 ACT REGULATIONS") and paragraph (b) of Rule 424 ("RULE 424(b)") of
the 1933 Act Regulations. The information included in such prospectus that was
omitted from such registration statement at the time it became effective but
that is deemed to be part of such registration statement at the time it became
effective pursuant to paragraph (b) of Rule 430A is referred to as "RULE 430A
INFORMATION." Each prospectus used before such registration statement became
effective, and any prospectus that omitted the Rule 430A Information that was
used after such effectiveness and prior to the execution and delivery of this
Agreement, is herein called a "PRELIMINARY PROSPECTUS." Such registration
statement, including the exhibits thereto, schedules thereto, if any, and the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act, at the time it became effective and including the Rule 430A
Information, is herein called the "REGISTRATION STATEMENT." Any registration
statement filed pursuant to Rule 462(b) of the 1933 Act Regulations is herein
referred to as the "RULE 462(b) REGISTRATION STATEMENT," and after such filing
the term "REGISTRATION STATEMENT" shall include the Rule 462(b) Registration
Statement. The final prospectus, including the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the 1933 Act, in the
form first furnished to the Underwriters for use in connection with the offering
of the Securities, is herein called the "PROSPECTUS." For purposes of this
Agreement, all references to the Registration Statement, any preliminary
prospectus, the Prospectus or any amendment or supplement to any of the
foregoing shall be deemed to include the copy filed with the Commission pursuant
to its Electronic Data Gathering, Analysis and Retrieval system ("▇▇▇▇▇").
All references in this Agreement to financial statements and schedules
and other information that is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the
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Registration Statement, any preliminary prospectus or the Prospectus, as the
case may be; and all references in this Agreement to amendments or supplements
to the Registration Statement, any preliminary prospectus or the Prospectus
shall be deemed to mean and include the filing of any document under the
Securities Exchange Act of 1934 (the "1934 ACT") that is incorporated by
reference in the Registration Statement, such preliminary prospectus or the
Prospectus, as the case may be.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to each Underwriter as of the date hereof, as of the
Closing Time referred to in Section 2(c) hereof, and as of each Date of Delivery
(if any) referred to in Section 2(b) hereof, and agrees with each Underwriter,
as follows:
(i) Compliance with Registration Requirements. The Company
meets the requirements for use of Form S-3 under the 1933 Act. Each of
the Registration Statement and any Rule 462(b) Registration Statement
has become effective under the 1933 Act and no stop order suspending
the effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose and for which the Company has received
notice have been instituted or are pending or, to the knowledge of the
Company, are contemplated by the Commission, and any request on the
part of the Commission for additional information has been complied
with or has been withdrawn or waived.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto
became effective and at the Closing Time (and, if any Option Securities
are purchased, at the Date of Delivery), the Registration Statement and
the Rule 462(b) Registration Statement complied and, as amended by any
such amendments and supplements thereto, will comply in all material
respects with the applicable requirements of the 1933 Act and the 1933
Act Regulations and the Registration Statement and the Rule 462(b)
Registration Statement did not and, as amended by any such amendments
and supplements thereto, will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
Neither the Prospectus nor any amendments or supplements thereto, at
the time the Prospectus or any such amendment or supplement was issued
and at the Closing Time (and, if any Option Securities are purchased,
at the Date of Delivery), included or will include an untrue statement
of a material fact or
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omitted or will omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading. The representations and
warranties in this subsection shall not apply to statements in or
omissions from the Registration Statement or Prospectus made in
reliance upon and in conformity with information furnished to the
Company in writing by any Underwriter through the Representatives
expressly for use in the Registration Statement or Prospectus.
Each preliminary prospectus and the prospectus filed as part
of the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the 1933 Act,
complied when so filed in all material respects with the 1933 Act
Regulations and each preliminary prospectus and the Prospectus
delivered to the Underwriters for use in connection with this offering
was identical in all material respects to the electronically
transmitted copies thereof filed with the Commission pursuant to ▇▇▇▇▇,
except to the extent permitted by Regulation S-T.
(ii) Incorporated Documents. The documents or portions of the
documents incorporated or deemed to be incorporated by reference in the
Registration Statement and the Prospectus, when they became effective
or at the time they were or hereafter are filed with the Commission,
complied and will comply in all material respects with the requirements
of the 1933 Act and the 1933 Act Regulations and the 1934 Act and the
rules and regulations of the Commission thereunder (the "1934 ACT
REGULATIONS"), as applicable.
(iii) Independent Accountants. The accountants who certified
the financial statements and supporting schedules included in the
Registration Statement are independent public accountants as required
by Regulation S-X promulgated under the 1933 Act and the 1934 Act.
(iv) Financial Statements. The financial statements included
in the Registration Statement and the Prospectus, together with the
related schedules and notes, present fairly the financial position of
the Company and its consolidated subsidiaries at the dates indicated
and the statement of operations, stockholders' equity and cash flows of
the Company and its consolidated subsidiaries for the periods
specified; said financial statements have been prepared in conformity
with generally accepted accounting principles ("GAAP") applied on a
consistent basis throughout the periods involved except as otherwise
noted therein. The supporting schedules, if any, included in the
Registration Statement present fairly in accordance with GAAP the
information required to be stated therein. The
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selected financial data and the summary financial information included
in the Prospectus present fairly the information shown therein and have
been compiled on a basis consistent with that of the audited financial
statements included in the Registration Statement.
(v) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, except as otherwise stated therein, (A)
there has been no material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business
prospects of the Company, its subsidiaries, as of the date hereof, and
each of the companies listed on Schedule B (each, a "MATERIAL HOLDING"
and collectively, the "MATERIAL HOLDINGS"), considered together as one
enterprise reflecting the Company's ownership interests in its
subsidiaries and its Material Holdings, whether or not arising in the
ordinary course of business (a "MATERIAL ADVERSE EFFECT"), (B) there
have been no transactions entered into by the Company, any of its
subsidiaries or any of its Material Holdings, other than those in the
ordinary course of business, which are material with respect to the
Company, its subsidiaries and its Material Holdings, considered
together as one enterprise reflecting the Company's ownership interests
in its subsidiaries and its Material Holdings, and (C) there has been
no dividend or distribution of any kind declared, paid or made by the
Company on any class of its capital stock.
(vi) Good Standing of the Company. The Company has been duly
organized and is validly subsisting as a corporation under the laws of
the Commonwealth of Pennsylvania and has corporate power and authority
to own, lease and operate its properties and to conduct its business as
described in the Prospectus and to enter into and perform its
obligations under this Agreement; and the Company is duly qualified as
a foreign corporation to transact business and is in good standing in
each other jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to be in
good standing would not result in a Material Adverse Effect.
(vii) Good Standing of Subsidiaries and Material Holdings.
Each of the subsidiaries of the Company and [EACH OF THE MATERIAL
HOLDINGS] of the Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has [, AND, TO THE COMPANY'S
KNOWLEDGE, EACH OF THE MATERIAL HOLDINGS HAS,] corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and is duly qualified as a
foreign corporation to transact
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business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure so to qualify or to be in good standing would not result in a
Material Adverse Effect; the issued and outstanding capital stock of
each of the Company's subsidiaries and each of the Company's Material
Holdings [HELD BY THE COMPANY OR A COMPANY SUBSIDIARY] has been duly
authorized and validly issued, is fully paid and non-assessable, and
the Company owns its interests in its subsidiaries and its Material
Holdings, in each case in the amounts and percentages (subject to
rounding) disclosed in the Registration Statement, directly or through
subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity [STOCK PLEDGE CARVEOUT];
none of the outstanding shares of capital stock of any of the Company's
subsidiaries or any of the Company's Material Holdings [HELD BY THE
COMPANY OR A COMPANY SUBSIDIARY] was issued in violation of the
preemptive or similar rights of any securityholder of such subsidiary
or such Material Holding.
(viii) Capitalization. The authorized, issued and outstanding
capital stock of the Company is as set forth in the Prospectus in the
column entitled "Actual" under the caption "Capitalization" (except for
subsequent issuances, if any, pursuant to this Agreement, pursuant to
reservations, agreements or employee benefit plans referred to in the
Prospectus or pursuant to the exercise of convertible securities,
warrants or options referred to in the Prospectus). The shares of
issued and outstanding capital stock of the Company have been duly
authorized and validly issued and are fully paid and non-assessable;
none of the outstanding stock of the Company was issued in violation of
the preemptive or other similar rights of any securityholder of the
Company.
(ix) Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by the Company.
(x) Authorization and Description of Securities. The
Securities to be purchased by the Underwriters from the Company have
been duly authorized for issuance and sale to the Underwriters pursuant
to this Agreement and, when issued and delivered by the Company
pursuant to this Agreement against payment of the consideration set
forth herein, will be validly issued and fully paid and non-assessable;
the Common Stock conforms to all statements relating thereto contained
in the Prospectus and such description conforms to the rights set forth
in the Company's Articles of Incorporation and Bylaws defining the
same; no holder of the Securities will be subject to personal liability
by reason of being such a holder; and
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the issuance of the Securities is not subject to the preemptive or
other similar rights of any securityholder of the Company.
(xi) Absence of Defaults and Conflicts. Neither the Company
nor any of its subsidiaries nor any of its Material Holdings is in
violation of its charter or by-laws or in default in the performance or
observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or other agreement or instrument to which
the Company, any of its subsidiaries or any of its Material Holdings is
a party or by which it or any of the Company, its subsidiaries or its
Material Holdings may be bound, or to which any of the property or
assets of the Company or any subsidiary is subject (collectively,
"AGREEMENTS AND INSTRUMENTS") except for such defaults that would not
result in a Material Adverse Effect; and the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated herein and in the Registration Statement (including the
issuance and sale of the Securities and the use of the proceeds from
the sale of the Securities as described in the Prospectus under the
caption "USE OF PROCEEDS") and compliance by the Company with its
obligations under this Agreement have been duly authorized by all
necessary corporate action and do not and will not, whether with or
without the giving of notice or passage of time or both, conflict with
or constitute a breach of, or default or Repayment Event (as defined
below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
of its subsidiaries or any of its Material Holdings pursuant to, the
Agreements and Instruments (except for such conflicts, breaches or
defaults or liens, charges, encumbrances or Repayment Events (as
defined below) that would not result in a Material Adverse Effect), nor
will such action result in any violation of the provisions of the
charter or by-laws of the Company or any of its subsidiaries or any of
its Material Holdings or any applicable law, statute, rule, regulation,
judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over
the Company, any of its subsidiaries or any of its Material Holdings or
any of the Company's, its subsidiaries' or its Material Holdings'
assets, properties or operations except such as may be required by the
securities or Blue Sky laws of the various states and jurisdictions in
connection with the offer and sale of the Securities or except for such
violations that would not result in a Material Adverse Effect. As used
herein, a "REPAYMENT EVENT" means any event or condition which gives
the holder of any note, debenture or other evidence of indebtedness (or
any person acting on such holder's behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such
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indebtedness by the Company, any of its subsidiaries or any of its
Material Holdings.
(xii) Absence of Labor Dispute. No labor dispute with the
employees of the Company, any of its subsidiaries or any of its
Material Holdings exists or, to the knowledge of the Company, is
imminent, and the Company is not aware of any existing or imminent
labor disturbance by the employees of any of the Company's, any of its
subsidiaries', or any of its Material Holdings' principal suppliers,
manufacturers, customers or contractors, which, in either case, may
reasonably be expected to result in a Material Adverse Effect.
(xiii) Absence of Proceedings. Except for those that are
described in the Registration Statement, there is no action, suit,
proceeding [OR, TO THE KNOWLEDGE OF THE COMPANY AFTER REASONABLE
INQUIRY, NO] inquiry or investigation, before or brought by any court
or governmental agency or body, domestic or foreign, now pending, or,
to the knowledge of the Company, threatened, against or affecting the
Company, any of its subsidiaries or [, TO THE KNOWLEDGE OF THE COMPANY
AFTER REASONABLE INVESTIGATION,] any of its Material Holdings, which is
required to be disclosed in the Registration Statement (other than as
disclosed therein), or which might reasonably be expected to result in
a Material Adverse Effect, or which might reasonably be expected to
materially and adversely affect the properties or assets of the
Company, its subsidiaries and its Material Holdings, considered
together as one enterprise reflecting the Company's ownership interests
in its subsidiaries and its Material Holdings, or the consummation of
the transactions contemplated in this Agreement or the performance by
the Company of its obligations hereunder; the aggregate of all pending
legal or governmental proceedings to which the Company, any of its
subsidiaries or [, TO THE KNOWLEDGE OF THE COMPANY AFTER REASONABLE
INVESTIGATION,] any of its Material Holdings is a party or of which any
of their respective property or assets is the subject which are not
described in the Registration Statement, including ordinary routine
litigation incidental to the business, could not reasonably be expected
to result in a Material Adverse Effect.
(xiv) Accuracy of Exhibits. There are no contracts or
documents which are required to be described in the Registration
Statement, the Prospectus or the documents incorporated by reference
therein or to be filed as exhibits thereto which have not been so
described and filed as required.
(xv) Possession of Intellectual Property. The Company, its
subsidiaries and [, TO THE KNOWLEDGE OF THE COMPANY AFTER REASONABLE
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INQUIRY,] its Material Holdings own or possess, or can acquire on
reasonable terms, adequate patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks, trade names or other
intellectual property (collectively, "INTELLECTUAL PROPERTY") necessary
to carry on the business now operated by them, except to the extent
that such failure to own, possess or acquire would not, singly or in
the aggregate, have a Material Adverse Effect, and neither the Company
nor any of its subsidiaries nor [, TO THE KNOWLEDGE OF THE COMPANY
AFTER REASONABLE INQUIRY,] any of its Material Holdings has received
any notice or is otherwise aware of any infringement of or conflict
with asserted rights of others with respect to any Intellectual
Property or of any facts or circumstances which would render any
Intellectual Property invalid or inadequate to protect the interest of
the Company, any of its subsidiaries or any of its Material Holdings
therein, and which infringement or conflict (if the subject of any
unfavorable decision, ruling or finding) or invalidity or inadequacy,
singly or in the aggregate, would result in a Material Adverse Effect.
(xvi) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance by the Company of
its obligations hereunder, in connection with the offering, issuance or
sale of the Securities hereunder or the consummation of the
transactions contemplated by this Agreement, except such as have been
already obtained or as may be required under the 1933 Act or the 1933
Act Regulations and foreign or state securities or blue sky law.
(xvii) Possession of Licenses and Permits. The Company, its
subsidiaries and its Material Holdings possess such permits, licenses,
approvals, consents and other authorizations (collectively,
"GOVERNMENTAL LICENSES") issued by the appropriate federal, state,
local or foreign regulatory agencies or bodies necessary to conduct the
business now operated by them, except to the extent that such failure
to possess would not, singly or in the aggregate, have a Material
Adverse Effect; the Company, its subsidiaries and its Material Holdings
are in compliance with the terms and conditions of all such
Governmental Licenses, except where the failure so to possess or comply
would not, singly or in the aggregate, have a Material Adverse Effect;
all of the Governmental Licenses are valid and in full force and
effect, except when the invalidity of such Governmental Licenses or the
failure of such Governmental Licenses to be in full force and effect
would not have a Material Adverse
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Effect; and neither the Company nor any of its subsidiaries nor any of
its Material Holdings has received any notice of proceedings relating
to the revocation or modification of any such Governmental Licenses
which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would result in a Material Adverse Effect.
(xviii) Title to Property. The Company, its subsidiaries and
its Material Holdings have good and marketable title to all real
property owned by the Company, its subsidiaries and its Material
Holdings and good title to all other properties owned by them, in each
case, free and clear of all mortgages, pledges, liens, security
interests, claims, restrictions or encumbrances of any kind except such
as (a) are described in the Prospectuses or (b) will not, singly or in
the aggregate, have a Material Adverse Effect; and all of the leases
and subleases material to the business of the Company, its subsidiaries
and its Material Holdings, considered together as one enterprise
reflecting the Company's ownership interests in its subsidiaries and
its Material Holdings, and under which the Company, any of its
subsidiaries or any of its Material Holdings holds properties described
in the Prospectuses, are in full force and effect, except to the extent
that such failure to be in full force and effect would not, singly or
in the aggregate, have a Material Adverse Effect; and neither the
Company nor any subsidiary nor any Material Holding has any notice of
any material claim of any sort that has been asserted by anyone adverse
to the rights of the Company, any of its subsidiaries or any of its
Material Holdings under any of the leases or subleases mentioned above,
or affecting or questioning the rights of the Company, such subsidiary
or such Material Holding to the continued possession of the leased or
subleased premises under any such lease or sublease, except to the
extent that such claim would not, singly or in the aggregate, have a
Material Adverse Effect.
(xix) Investment Company Act. The Company is not, and upon the
issuance and sale of the Securities as contemplated herein, will not
be, required to register as an "INVESTMENT COMPANY" under the
Investment Company Act of 1940, as amended (the "1940 ACT").
(xx) Environmental Laws. Except as described in the
Registration Statement and except as would not, singly or in the
aggregate, have a Material Adverse Effect, (A) neither the Company nor
any of its subsidiaries nor [, TO THE KNOWLEDGE OF THE COMPANY AFTER
REASONABLE INQUIRY,] any of its Material Holdings is in violation of
any federal, state, local or foreign statute, law, rule, regulation,
ordinance, code, policy or rule of common law or any judicial or
administrative interpretation thereof, including any judicial or
administrative order, consent, decree or judgment, relating to
pollution or protection of human health, the
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environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including,
without limitation, laws and regulations relating to the release or
threatened release of chemicals, pollutants, contaminants, wastes,
toxic substances, hazardous substances, petroleum or petroleum products
(collectively, "HAZARDOUS MATERIALS") or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials (collectively, "ENVIRONMENTAL
LAWS"), (B) the Company, its subsidiaries and [, TO THE KNOWLEDGE OF
THE COMPANY AFTER REASONABLE INQUIRY,] its Material Holdings have all
permits, authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their requirements,
(C) there are no pending or threatened administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigation or proceedings
relating to any Environmental Law against the Company, any of its
subsidiaries or any of its Material Holdings and (D) there are no
events or circumstances that might reasonably be expected to form the
basis of an order for clean-up or remediation, or an action, suit or
proceeding by any private party or governmental body or agency, against
or affecting the Company, any of its subsidiaries or [, TO THE
KNOWLEDGE OF THE COMPANY AFTER REASONABLE INQUIRY,] any of its Material
Holdings relating to Hazardous Materials or any Environmental Laws.
(xxi) Year 2000. The Company is reviewing its operations,
those of its subsidiaries and [, TO THE KNOWLEDGE OF THE COMPANY AFTER
REASONABLE INQUIRY,] those of its Material Holdings to evaluate the
extent to which the businesses or operations of the Company, any of its
subsidiaries or any of its Material Holdings have been affected by the
Year 2000 Problem; as a result of such review, the Company believes
that the disclosure in the Prospectuses relating to the Year 2000
Problem is accurate in all material respects. As used in clause (xxi),
the "YEAR 2000 PROBLEM" means any significant risk that computer
hardware or software used in the receipt, transmission, processing,
manipulation, storage, retrieval, transmission or other utilization of
data or in the operation of mechanical or electrical systems of any
kind has or will materially affect the business operations of the
Company, any of its subsidiaries or any of its Material Holdings after
December 31, 1999.
(b) Officers' Certificates. Any certificate signed by any officer of
the Company, any of its subsidiaries or any of its Material Holdings delivered
to the Representatives or to counsel for the Underwriters shall be deemed a
representation and warranty by the Company to each Underwriter as to the matters
covered thereby.
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SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Initial Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company agrees to sell to each Underwriter, severally and not
jointly, and each Underwriter, severally and not jointly, agrees to purchase
from the Company, at the price per share set forth in Schedule C, the number of
Initial Securities set forth in Schedule A opposite the name of such
Underwriter, plus any additional number of Initial Securities which such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof.
(b) Option Securities. In addition, on the basis of the
representations and warranties herein contained and subject to the terms and
conditions herein set forth, the Company hereby grants an option to the
Underwriters, severally and not jointly, to purchase up to an additional
1,500,000 shares of Common Stock at the price per share set forth in Schedule C,
less an amount per share equal to any dividends or distributions declared by the
Company and payable on the Initial Securities but not payable on the Option
Securities. The option hereby granted will expire 30 days after the date hereof
and may be exercised in whole or in part [FROM TIME TO TIME] only for the
purpose of covering over-allotments which may be made in connection with the
offering and distribution of the Initial Securities upon notice by the
Representatives to the Company setting forth the number of Option Securities as
to which the several Underwriters are then exercising the option and the time
and date of payment and delivery for such Option Securities. Any such time and
date of delivery (a "DATE OF DELIVERY") shall be determined by the
Representatives, but shall not be earlier than two nor later than seven full
business days after the exercise of said option, nor in any event prior to the
Closing Time, as hereinafter defined. If the option is exercised as to all or
any portion of the Option Securities, each of the Underwriters, acting severally
and not jointly, will purchase that proportion of the total number of Option
Securities then being purchased which the number of Initial Securities set forth
in Schedule A opposite the name of such Underwriter bears to the total number of
Initial Securities, subject in each case to such adjustments as the
Representatives in their discretion shall make to eliminate any sales or
purchases of fractional shares.
(c) Payment. Payment of the purchase price for [, AND DELIVERY OF
CERTIFICATES FOR,] the Initial Securities shall be made at the offices of ▇▇▇▇▇
▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or at such
other place as shall be agreed upon by the Representatives and the Company, at
9:00 A.M. (Eastern time) on the third (fourth, if the pricing occurs after 4:30
P.M. (Eastern time) on any given day) business day after the date hereof (unless
postponed in accordance with the provisions of Section 10), or such other time
not later than ten business days after such date as shall be agreed upon by the
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Representatives and the Company (such time and date of payment and delivery
being herein called "CLOSING TIME").
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for [, AND DELIVERY
OF CERTIFICATES FOR,] such Option Securities shall be made at the
above-mentioned offices, or at such other place as shall be agreed upon by the
Representatives and the Company, on each Date of Delivery as specified in the
notice from the Representatives to the Company.
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company against delivery to
the Representatives for the respective accounts of the Underwriters of
certificates for the Securities to be purchased by them. It is understood that
each Underwriter has authorized the Representatives, for its account, to accept
delivery of, receipt for, and make payment of the purchase price for, the
Initial Securities and the Option Securities, if any, which it has agreed to
purchase. ▇▇▇▇▇▇▇ ▇▇▇▇▇, individually and not as representative of the
Underwriters, may (but shall not be obligated to) make payment of the purchase
price for the Initial Securities or the Option Securities, if any, to be
purchased by any Underwriter whose funds have not been received by the Closing
Time or the relevant Date of Delivery, as the case may be, but such payment
shall not relieve such Underwriter from its obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial
Securities and the Option Securities, if any, shall be in such denominations and
registered in such names as the Representatives may request in writing at least
one full business day before the Closing Time or the relevant Date of Delivery,
as the case may be. The certificates for the Initial Securities and the Option
Securities, if any, will be made available for examination and packaging by the
Representatives in The City of New York not later than 10:00 A.M. (Eastern time)
on the business day prior to the Closing Time or the relevant Date of Delivery,
as the case may be.
SECTION 3. Covenants of the Company. The Company covenants with
each Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests.
The Company, subject to Section 3(b), will comply with the requirements of Rule
430A and will notify the Representatives immediately, and confirm the notice in
writing, (1) when any post-effective amendment to the Registration Statement
shall become effective, or any supplement to the Prospectus or any amended
Prospectus shall have been filed, (2) of the receipt of any comments from the
Commission, (3) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or for
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additional information, and (4) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or of any order
preventing or suspending the use of any preliminary prospectus, or of the
suspension of the qualification of the Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings for any of
such purposes. The Company will promptly effect the filings necessary pursuant
to Rule 424(b) and will take such steps as it deems necessary to ascertain
promptly whether the form of prospectus transmitted for filing under Rule 424(b)
was received for filing by the Commission and, in the event that it was not, it
will promptly file such prospectus. If any stop order is issued, the Company
will use its reasonable efforts to obtain the lifting thereof at the earliest
possible moment.
(b) Filing of Amendments. The Company will give the Representatives
notice of its intention to file or prepare any amendment to the Registration
Statement (including any filing under Rule 462(b)) or any amendment, supplement
or revision to either the prospectus included in the Registration Statement at
the time it became effective or to the Prospectus, whether pursuant to the 1933
Act, the 1934 Act or otherwise, will furnish the Representatives with copies of
any such documents, to the extent practicable, a reasonable amount of time prior
to such proposed filing or use, as the case may be, and will not file or use any
such document to which the Representatives or counsel for the Underwriters shall
[REASONABLY] object.
(c) Delivery of Registration Statements. The Company has furnished or
will deliver to the Representatives and counsel for the Underwriters, without
charge, signed copies of the Registration Statement as originally filed and of
each amendment thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated or deemed to be incorporated by
reference therein) and signed copies of all consents and certificates of
experts, and will also deliver to the Representatives, without charge, a
conformed copy of the Registration Statement as originally filed and of each
amendment thereto (without exhibits) for each of the Underwriters. The copies of
the Registration Statement and each amendment thereto furnished to the
Underwriters will be identical in all material respects to the electronically
transmitted copies thereof filed with the Commission pursuant to ▇▇▇▇▇, except
to the extent permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus as
such Underwriter reasonably requested, and the Company hereby consents to the
use of such copies for purposes permitted by the 1933 Act. The Company will
furnish to each Underwriter, without charge, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act but no
later than 90 days after the effective date of the Registration Statement, such
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number of copies of the Prospectus (as amended or supplemented) as such
Underwriter may reasonably request. The Prospectus and any amendments or
supplements thereto furnished to the Underwriters will be identical in all
material respects to the electronically transmitted copies thereof filed with
the Commission pursuant to ▇▇▇▇▇, except to the extent permitted by Regulation
S-T.
(e) Continued Compliance with Securities Laws. The Company will comply
with the 1933 Act and the 1933 Act Regulations and the 1934 Act and the 1934 Act
Regulations so as to permit the completion of the distribution of the Securities
as contemplated in this Agreement and in the Prospectus. If at any time, but no
later than 90 days after the effective date of the Registration Statement, when
a prospectus is required by the 1933 Act to be delivered in connection with
sales of the Securities, any event shall occur or condition shall exist as a
result of which it is necessary, in the opinion of counsel for the Underwriters
or for the Company, to amend the Registration Statement or amend or supplement
the Prospectus in order that the Prospectus will not include any untrue
statements of a material fact or omit to state a material fact necessary in
order to make the statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, or if it
shall be necessary, in the opinion of such counsel, at any such time to amend
the Registration Statement or amend or supplement the Prospectus in order to
comply with the requirements of the 1933 Act or the 1933 Act Regulations, the
Company will promptly prepare and file with the Commission, subject to Section
3(b), such amendment or supplement as may be necessary to correct such statement
or omission or to make the Registration Statement or the Prospectus comply with
such requirements, and the Company will furnish to the Underwriters such number
of copies of such amendment or supplement as the Underwriters may reasonably
request.
(f) Blue Sky Qualifications. The Company will use its best efforts, in
cooperation with the Underwriters, to qualify the Securities for offering and
sale under the applicable securities laws of such states and other jurisdictions
(domestic or foreign) as the Representatives may designate and to maintain such
qualifications in effect for a period of not less than six months from the later
of the effective date of the Registration Statement and any Rule 462(b)
Registration Statement; provided, however, that the Company shall not be
obligated to file any general consent to service of process or to qualify as a
foreign corporation or as a dealer in securities in any jurisdiction in which it
is not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject. In each
jurisdiction in which the Securities have been so qualified, the Company will
file such statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for a period of not less
than six months from the effective date of the Registration Statement and any
Rule 462(b) Registration Statement.
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(g) Rule 158. The Company will timely file such reports pursuant to
the 1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
(h) Use of Proceeds. The Company [INTENDS TO/WILL] use the net
proceeds received by it from the sale of the Securities in the manner specified
in the Prospectus under "Use of Proceeds."
(i) Listing. The Company will use its best efforts to effect the
listing of the Securities on the New York Stock Exchange, Inc.
(j) Restriction on Sale of Securities. During a period of 90 days from
the date of the Prospectus, the Company will not, without the prior written
consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇, (1) directly or indirectly, offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase or otherwise
transfer or dispose of any share of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock or file any registration
statement under the 1933 Act with respect to any of the foregoing or (2) enter
into any swap or any other agreement or any transaction that transfers, in whole
or in part, directly or indirectly, the economic consequences of ownership of
the Common Stock, whether any such swap or transaction described in clause (1)
or (2) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not apply to (A)
the Securities to be sold hereunder, (B) any shares of Common Stock issued by
the Company upon the exercise of an option, warrant or right or the conversion
of a security outstanding on the date hereof and referred to in the Prospectus,
(C) any shares of Common Stock issued or options to purchase Common Stock
granted pursuant to existing employee benefit plans of the Company referred to
in the Prospectus or (D) any shares of Common Stock issued pursuant to any
non-employee director stock plan or dividend reinvestment plan.
(k) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
use reasonable efforts to file all documents required to be filed with the
Commission pursuant to the 1934 Act within the time periods required by the
rules and regulations of the Commission thereunder.
SECTION 4. Payment of Expenses.
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(a) Expenses. The Company will pay or cause to be paid all expenses
incident to the performance of its obligations under this Agreement, including
(1) the preparation, printing and filing of the Registration Statement
(including financial statements and exhibits) as originally filed and of each
amendment thereto, [(2) THE PREPARATION, PRINTING AND DELIVERY TO THE
UNDERWRITERS OF THIS AGREEMENT, ANY AGREEMENT AMONG UNDERWRITERS AND SUCH OTHER
DOCUMENTS AS MAY BE REQUIRED IN CONNECTION WITH THE OFFERING, PURCHASE, SALE
ISSUANCE OR DELIVERY OF THE SECURITIES,] (3) the preparation, issuance and
delivery of the certificates for the Securities to the Underwriters, including
any stock or other transfer taxes and any stamp or other duties payable upon the
sale, issuance or delivery of the Securities to the Underwriters, (4) the fees
and disbursements of the Company's counsel, accountants and other advisors, (5)
the qualification of the Securities under securities laws in accordance with the
provisions of Section 3(f) hereof, including filing fees and the reasonable fees
and disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation of the Blue Sky Survey and any supplement
thereto, (6) the printing and delivery to the Underwriters of copies of each
preliminary prospectus and of the Prospectus and any amendments or supplements
thereto, [(7) THE PREPARATION AND PRINTING, USING THE ON-SITE FACILITIES OF
COUNSEL FOR THE UNDERWRITERS, OF COPIES OF THE BLUE SKY SURVEY AND ANY
SUPPLEMENT THERETO,] (8) the fees and expenses of any transfer agent or
registrar for the Securities and (9) the filing fees incident to, and the
reasonable fees and disbursements of counsel to the Underwriters in connection
with, the review by the National Association of Securities Dealers, Inc. (the
"NASD") of the terms of the sale of the Securities and (10) the fees and
expenses incurred in connection with the listing of the Securities on the New
York Stock Exchange.
(b) Termination of Agreement. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5 or Section
9(a)(1)["NOT IF INITIAL CLOSING IS COMPLETED . . ." ISSUE] hereof, the Company
shall reimburse the Underwriters for all of their out-of-pocket expenses,
including the reasonable fees and disbursements of counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of
the several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company contained in Section 1 hereof or
in certificates of any officer of the Company, any of its subsidiaries or any of
its Material Holdings delivered pursuant to the provisions hereof, to the
performance by the Company of its covenants and other obligations hereunder, and
to the following further conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the effectiveness of the
Registration
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Statement shall have been issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission, and any request on the part of the
Commission for additional information (unless otherwise withdrawn or waived [OR
MODIFIED]) shall have been complied with to the reasonable satisfaction of
counsel to the Underwriters. A prospectus containing the Rule 430A Information
shall have been filed with the Commission in accordance with Rule 424(b) (or a
post-effective amendment providing such information shall have been filed and
declared effective in accordance with the requirements of Rule 430A).
(b) Opinion of Counsel for Company. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of (x) ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, counsel for the Company, (y) ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, general counsel of the Company and (z) ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, special
1940 Act counsel for the Company, in form and substance satisfactory to counsel
for the Underwriters [AND SUBSTANTIALLY EQUIVALENT TO EXHIBIT A ATTACHED
HERETO], together with signed or reproduced copies of such letter for each of
the other Underwriters to the effect set forth in Exhibit A and Exhibit B
hereto, respectively. Such counsel may also state that, insofar as such opinion
involves factual matters, they have relied, to the extent they deem proper, upon
certificates of officers of the Company, its subsidiaries and its Material
Holdings and certificates of public officials.
(c) Opinion of Counsel for Underwriters. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Underwriters, together with
signed or reproduced copies of such letter for each of the other Underwriters in
form and substance satisfactory to the Representatives. Such counsel may state
that, insofar as such opinion involves factual matters, they have relied, to the
extent they deem proper, upon certificates of officers of the Company, its
subsidiaries and its Material Holdings and certificates of public officials.
(d) Officers' Certificate. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectus, any material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business prospects of the
Company, its subsidiaries or its Material Holdings, considered together as one
enterprise reflecting the Company's ownership interests in its subsidiaries and
its Material Holdings, whether or not arising in the ordinary course of
business, and the Representatives shall have received a certificate of the
President or a Vice President of the Company and of the chief financial or chief
accounting officer of the Company, dated as of Closing Time, to the effect that
(i) there has been no such material adverse change, [WITH RESPECT TO THE
COMPANY, NOR TO THE COMPANY'S KNOWLEDGE, WITH RESPECT TO ANY MATERIAL HOLDING]
(ii) the representations and warranties in Section 1(a) hereof are true and
correct with the
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same force and effect as though expressly made at and as of Closing Time, (iii)
the Company has complied with all agreements and satisfied all conditions on its
part to be performed or satisfied at or prior to Closing Time, and (iv) no stop
order suspending the effectiveness of the Registration Statement has been issued
and no proceedings for that purpose have been instituted or are pending or, to
the knowledge of such officer, are contemplated by the Commission.
(e) Accountant's Comfort Letters. At the time of the execution of this
Agreement, the Representatives shall have received from KPMG LLP a letter dated
such date, in form and substance satisfactory to the Representatives, together
with signed or reproduced copies of such letter for each of the other
Underwriters containing statements and information of the type ordinarily
included in accountants' "COMFORT LETTERS" to underwriters in conformity with
the Statement on Auditing Standards 72 and amendments thereto with respect to
the financial statements and certain financial information of the Company
contained in the Registration Statement and the Prospectus.
(f) Bring-down Comfort Letter. At Closing Time, the Representatives
shall have received from KPMG LLP a letter, dated as of Closing Time, to the
effect that they reaffirm the statements made in the letter furnished pursuant
to subsection (e) of this Section, except that the specified date referred to
shall be a date not more than three business days prior to Closing Time.
(g) Approval of Listing. At Closing Time, the Securities shall have
been approved for listing on the New York Stock Exchange, subject only to
official notice of issuance.
(h) No Objection. The NASD has confirmed that it has not raised any
objection with respect to the fairness and reasonableness of the underwriting
terms and arrangements.
(i) Lock-up Agreements. At the date of this Agreement, the
Representatives shall have received an agreement substantially in the form of
Exhibit C hereto signed by the persons listed on Schedule D hereto.
(j) Conditions to Purchase of Option Securities. In the event that the
Underwriters exercise their option provided in Section 2(b) hereof to purchase
all or any portion of the Option Securities, the representations and warranties
of the Company contained herein and the statements in any certificates furnished
by the Company, any of its subsidiaries or any of its Material Holdings
hereunder shall be true and correct [IN ALL MATERIAL RESPECTS] as of each Date
of Delivery and, at the relevant Date of Delivery, the Representatives shall
have received:
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(i) Officers' Certificate. A certificate, dated such Date of
Delivery, of the Company, executed on its behalf by the President or a
Vice President of the Company and of the chief financial or chief
accounting officer of the Company confirming that the certificate
delivered at the Closing Time pursuant to Section 5(d) hereof remains
true and correct as of such Date of Delivery.
(ii) Opinion of Counsel for Company. The favorable opinion of
▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, counsel for the Company, and ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, general counsel of the Company, in form and substance
satisfactory to counsel for the Underwriters [AND SUBSTANTIALLY
EQUIVALENT TO EXHIBIT A ATTACHED HERETO], dated such Date of Delivery,
relating to the Option Securities to be purchased on such Date of
Delivery and otherwise to the same effect as the opinion required by
Section 5(b) hereof.
(iii) Opinion of Special 1940 Act Counsel for the Company.
Opinion of Special 1940 Act Counsel. The favorable opinion of ▇▇▇▇▇
▇▇▇▇ & ▇▇▇▇▇▇▇▇, special 1940 Act counsel for the Company, dated such
Date of Delivery, relating to the 1940 Act and otherwise to the same
effect as the opinion required by Section 5(b) hereof.
(iv) Opinion of Counsel for Underwriters. The favorable
opinion of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Underwriters, dated
such Date of Delivery, relating to the Option Securities to be
purchased on such Date of Delivery and otherwise to the same effect as
the opinion required by Section 5(c) hereof.
(v) Bring-down Comfort Letter. A letter from KPMG LLP, in form
and substance satisfactory to the Representatives and dated such Date
of Delivery, substantially in the same form and substance as the letter
furnished to the Representatives pursuant to Section 5(f) hereof,
except that the "SPECIFIED DATE" in the letter furnished pursuant to
this paragraph shall be a date not more than five days prior to such
Date of Delivery.
(k) Additional Documents. At Closing Time and at each Date of Delivery
counsel for the Underwriters shall have been furnished with such documents and
opinions as they may reasonably require for the purpose of enabling them to pass
upon the issuance and sale of the Securities as herein contemplated, or in order
to evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company in connection with the issuance and sale of the Securities
as herein contemplated shall be satisfactory in form and substance to
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the Representatives and counsel for the Underwriters [IN THEIR REASONABLE
JUDGMENT].
(l) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled, this
Agreement, or, in the case of any condition to the purchase of Option Securities
on a Date of Delivery which is after the Closing Time, the obligations of the
several Underwriters to purchase the relevant Option Securities, may be
terminated by the Representatives by notice to the Company at any time at or
prior to Closing Time or such Date of Delivery, as the case may be, and such
termination shall be without liability of any party to any other party except as
provided in Section 4 and except that Sections 1, 6, 7 and 8 [CLOSING AND
TERMINATION?] shall survive any such termination and remain in full force and
effect.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters. 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 1933 Act or Section 20 of
the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact included in
any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided
that (subject to Section 6(d) below) any such settlement is effected
with the written consent of the Company; and
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(iii) against any and all expense whatsoever, as incurred
(including, subject to Section 6(c), the fees and disbursements of
counsel chosen by ▇▇▇▇▇▇▇ ▇▇▇▇▇), reasonably incurred in investigating,
preparing or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to the
extent that any such expense is not paid under (i) or (ii) above; and
provided further that the Company will not be liable to any Underwriter
with respect to any Prospectus to the extent that the Company shall
sustain the burden of proving that any such loss, liability, claim,
damage or expense resulted from the fact that such Underwriter, in
contravention of a requirement of this Agreement or applicable law,
sold Securities to a person to whom such Underwriter failed to send or
give, at or prior to the Closing Date, a copy of the Final Prospectus,
as then amended or supplemented if: (i) the Company has previously
furnished copies thereof (sufficiently in advance of the Closing Date
to allow for distribution by the Closing Date) to the Underwriter and
the loss, liability, claim, damage or expense of such Underwriter
resulted from an untrue statement or omission of a material fact
contained in or omitted from the Preliminary Prospectus which was
corrected in the Final Prospectus as, if applicable, amended or
supplemented prior to the Closing Date and such Final Prospectus was
required by law to be delivered at or prior to the written confirmation
of sale to such person and (ii) such failure to give or send such Final
Prospectus by the Closing Date to the party or parties asserting such
loss, liability, claim, damage or expense would have constituted the
sole defense to the claim asserted by such person.
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through the Representatives expressly for use in the Registration
Statement (or any amendment thereto), including the Rule 430A Information or any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto).
(b) Indemnification of Company, Directors and Officers. Each
Underwriter severally agrees to indemnify and hold harmless the Company, its
directors, each of its officers who signed the Registration Statement, and each
person, if any, who controls the Company within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection (a)
of this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or
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any amendment thereto), including the Rule 430A Information or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the
Company by such Underwriter through the Representatives expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary prospectus
or the Prospectus (or any amendment or supplement thereto).
(c) Actions against Parties; Notification. Each indemnified party
shall give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the extent it is
not materially prejudiced as a result thereof and in any event shall not relieve
it from any liability which it may have otherwise than on account of this
indemnity agreement. In the case of parties indemnified pursuant to Section 6(a)
above, counsel to the indemnified parties shall be selected by ▇▇▇▇▇▇▇ ▇▇▇▇▇,
and, in the case of parties indemnified pursuant to Section 6(b) above, counsel
to the indemnified parties shall be selected by the Company. An indemnifying
party may participate at its own expense in the defense of any such action;
provided, however, that counsel to the indemnifying party shall not (except with
the consent of the indemnified party) also be counsel to the indemnified party.
In no event shall the indemnifying parties be liable for fees and expenses of
more than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could reasonably be sought under this Section 6
or Section 7 hereof (whether or not the indemnified parties are actual or
potential parties thereto), unless such settlement, compromise or consent (1)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (2) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.
SECTION 7. Contribution. If the indemnification provided for in Section
6 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (1) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
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hand and the Underwriters on the other hand from the offering of the Securities
pursuant to this Agreement or (2) if the allocation provided by clause (1) is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (1) above but also the
relative fault of the Company on the one hand and of the Underwriters on the
other hand in connection with the statements or omissions, which resulted in
such losses, liabilities, claims, damages or expenses, as well as any other
relevant equitable considerations.
The relative benefits received by the Company on the one hand and the
Underwriters on the other hand in connection with the offering of the Securities
pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Securities
pursuant to this Agreement (before deducting expenses) received by the Company
and the total underwriting discount received by the Underwriters, in each case
as set forth on the cover of the Prospectus.
The relative fault of the Company on the one hand and the Underwriters
on the other hand shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.
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29
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company. The Underwriters'
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the number of Initial Securities set forth opposite their
respective names in Schedule A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of the Company executed by officers of the Company,
any of its subsidiaries or any of its Material Holdings submitted pursuant
hereto, shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or controlling person, or
by or on behalf of the Company, and shall survive delivery of the Securities to
the Underwriters.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Representatives may terminate this
Agreement, by notice to the Company, at any time at or prior to Closing Time (1)
if there has been, since the time of execution of this Agreement or since the
respective dates as of which information is given in the Prospectus, material
adverse change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company, its subsidiaries or its
Material Holdings, considered together as one enterprise reflecting the
Company's ownership interests in its subsidiaries and its Material Holdings,
whether or not arising in the ordinary course of business, or (2) if there has
occurred since the time of the execution of this Agreement any material adverse
change in the financial markets in the United States or the international
financial markets, any outbreak of hostilities or escalation thereof or other
calamity or crisis or any change or development involving a prospective change
in national or international political, financial or economic conditions, in
each case the effect of which is such as to make it, in the judgment of the
Representatives, impracticable to market the Securities or to enforce contracts
for the sale of the Securities, or (3) if trading in any securities of the
Company has been suspended or materially limited by the Commission or the New
York Stock Exchange, or if trading generally on the
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American Stock Exchange or the New York Stock Exchange or in the Nasdaq National
Market has been suspended or materially limited, or minimum or maximum prices
for trading have been fixed, or maximum ranges for prices have been required, by
any of said exchanges or by such system or by order of the Commission, the
National Association of Securities Dealers, Inc. or any other governmental
authority, or (4) if a banking moratorium has been declared by either Federal or
New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7 and 8 shall survive such termination and remain in full force and
effect.
SECTION 10. Default by One or More of the Underwriters. If one or more
of the Underwriters shall fail at Closing Time or a Date of Delivery to purchase
the Securities which it or they are obligated to purchase under this Agreement
(the "DEFAULTED SECURITIES"), the Representatives shall have the right, within
24 hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, the Representatives shall not have
completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of Securities to be purchased on such date, each of the non-defaulting
Underwriters shall be obligated, severally and not jointly, to purchase the full
amount thereof in the proportions that their respective underwriting obligations
hereunder bear to the underwriting obligations of all non-defaulting
Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the number of
Securities to be purchased on such date, this Agreement or, with respect to any
Date of Delivery which occurs after the Closing Time, the obligation of the
Underwriters to purchase and of the Company to sell the Option Securities to be
purchased and sold on such Date of Delivery shall terminate without liability on
the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement or, in the case of a Date of Delivery which is after the
Closing Time, which does not result in a termination of the obligation of the
Underwriters to purchase and the Company to sell the relevant Option Securities,
as the case
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may be, either (1) the Representatives or (2) the Company shall have the right
to postpone Closing Time or the relevant Date of Delivery, as the case may be,
for a period not exceeding seven days in order to effect any required changes in
the Registration Statement or Prospectus or in any other documents or
arrangements. As used herein, the term "UNDERWRITER" includes any person
substituted for an Underwriter under this Section 10.
SECTION 11. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representatives at ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, attention of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
Esq.; notices to the Company shall be directed to it at [BUILDING 800, ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ATTENTION OF ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇, ESQ.].
SECTION 12. Parties. This Agreement shall inure to the benefit of and
be binding upon the Underwriters and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters and the Company and their respective successors and the controlling
persons and officers and directors referred to in Sections 6 and 7 and their
heirs and legal representatives, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision herein contained. This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the Underwriters and the Company and their
respective successors, and said controlling persons and officers and directors
and their heirs and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Securities from any Underwriter
shall be deemed to be a successor by reason merely of such purchase.
SECTION 13. Governing Law and Time. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED
TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 14. Effect of Headings. The Article and Section headings herein
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Underwriters and the Company in accordance with its terms.
Very truly yours,
SAFEGUARD SCIENTIFICS, INC.
By______________________________________
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
DEUTSCHE BANK SECURITIES INC.
▇▇▇▇▇▇ BROTHERS INC.
PRUDENTIAL SECURITIES INCORPORATED
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, INC.
By: ▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By______________________________________
Authorized Signatory
For itself and as Representative of the other Underwriters named in Schedule A
hereto.
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SCHEDULE A
Sch A-1
34
SCHEDULE B
LIST OF MATERIAL HOLDINGS
Sch ▇-▇
▇▇
▇▇▇▇▇▇▇▇ ▇
▇▇▇ ▇-▇
▇▇
▇▇▇▇▇▇▇▇ ▇
LIST OF PERSONS SUBJECT TO LOCK-UP
Sch D-1
37
Exhibit A
FORM OF OPINION OF ▇▇▇▇▇▇ ▇▇▇▇▇ & BOCKIUS LLP
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
A-1
38
Exhibit B
FORM OF OPINION OF GENERAL COUNSEL OF THE COMPANY
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
B-1
39
Exhibit C
FORM OF OPINION OF ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
C-1
40
Exhibit D
D-1