TH&T DRAFT 11/2/99
3,500,000 SHARES
CVC, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
, 1999
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▇▇▇▇▇▇ BROTHERS INC.
PRUDENTIAL SECURITIES INCORPORATED
▇▇ ▇▇▇▇▇ SECURITIES CORPORATION
WARBURG DILLON READ LLC,
As Representatives of the several
Underwriters named in Schedule 1,
c/▇ ▇▇▇▇▇▇ Brothers Inc.
Three World Financial Center
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
CVC, Inc., a Delaware corporation (the "COMPANY"), and certain
stockholders of the Company named in Schedule 2 hereto (the "Selling
Stockholders") propose to sell an aggregate of 3,500,000 shares (the "FIRM
Stock") of the Company's Common Stock, par value $.01 per share (the "COMMON
STOCK"). Of the 3,500,000 shares of the Firm Stock, 3,000,000 are being sold by
the Company and 500,000 by the Selling Stockholders. In addition, the Selling
Stockholders severally and not jointly propose to grant to the Underwriters
named in Schedule 1 hereto (the "UNDERWRITERS") an option to purchase an
aggregate of up to an additional 525,000 shares of the Common Stock on the terms
and for the purposes set forth in Section 2 (the "OPTION STOCK"). The Firm Stock
and the Option Stock, if purchased, are hereinafter collectively called the
"STOCK." This is to confirm the agreement concerning the purchase of the Stock
from the Company and the Selling Stockholders by the Underwriters named in
Schedule 1 hereto (the "UNDERWRITERS").
1. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY AND
THE OPERATING Subsidiary. The Company and CVC Products, Inc., a Delaware
corporation and wholly-owned subsidiary of the Company (the "Operating
Subsidiary"), jointly and severally, represent, warrant and agree that:
(a) A registration statement on Form S-1 and one or more
amendments thereto with respect to the Stock has (i) been prepared
by the Company in material conformity with the requirements of the
United States Securities Act of 1933, as amended (the "SECURITIES
ACT") and the rules and regulations (the "RULES AND REGULATIONS") of
the United States Securities and Exchange Commission (the
"COMMISSION") thereunder, (ii) been filed with the Commission under
the Securities Act and (iii) become effective under the Securities
Act. Copies of such registration statement and the amendments
thereto have been delivered by the Company to you as the
representatives (the "REPRESENTATIVES") of the Underwriters. (If you
are the only Underwriters, all references herein to the
Representatives shall be deemed to be to the Underwriters.) As used
in this Agreement, "EFFECTIVE TIME" means the date and the time as
of which such registration statement, or the most recent
post-effective amendment thereto, if any, was declared effective by
the Commission; "EFFECTIVE DATE" means the date of the Effective
Time; "PRELIMINARY PROSPECTUS" means each prospectus included in
such registration statement, or amendments thereof, before it became
effective under the Securities Act and any prospectus filed with the
Commission by the Company pursuant to Rule 424(a) of the Rules and
Regulations; "REGISTRATION STATEMENT" means such registration
statement, as amended at the Effective Time, including all
information contained in the final prospectus filed with the
Commission pursuant to Rule 424(b) of the Rules and Regulations in
accordance with Section 5(a) hereof and deemed to be a part of the
registration statement as of the Effective Time pursuant to
paragraph (b) of Rule 430A of the Rules and Regulations; "RULE
462(B) REGISTRATION Statement" means any registration statement
filed pursuant to Rule 462(b) of the Rules and Regulations, and
after such filing, the term "REGISTRATION STATEMENT" shall include
the Rule 462(b) Registration Statement; and "PROSPECTUS" means such
final prospectus, as first filed with the Commission pursuant to
paragraph (1) or (4) of Rule 424(b) of the Rules and Regulations.
The Commission has not issued any order preventing or suspending the
use of any Preliminary Prospectus.
(b) The Registration Statement conforms, and the Prospectus
and any further amendments or supplements to the Registration Statement
or the Prospectus and any Rule 462(b) Registration Statement will, when
they become effective or are filed with the Commission, as the case may
be, conform in all material respects to the requirements of the
Securities Act and the Rules and Regulations and do not and will not,
as of the applicable effective date (as to the Registration Statement
and any amendment thereto) and as of the applicable filing date (as to
the Prospectus and any amendment or supplement thereto) contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading; PROVIDED that no representation or warranty is
made as to information contained in or omitted from the Registration
Statement or the Prospectus in reliance upon and in conformity with
written information furnished to the Company through the
Representatives by or on behalf of any Underwriter specifically for
inclusion therein. To the extent applicable, the copies of the
Registration Statement and each other document referred to in
subparagraph (a) above that have been or will be furnished to the
Underwriters have been and will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to the
Commission's so called ▇▇▇▇▇ system, except to the extent permitted by
Regulation S-T.
(c) The Company and each of its subsidiaries (as defined in
Section 17) have been duly incorporated and are validly existing as
corporations in good standing under the laws of their respective
jurisdictions of incorporation, are duly qualified to do business and
are in good standing as foreign corporations in each jurisdiction in
which their respective ownership or lease of property or the conduct of
their respective businesses requires such qualification, except where
the failure to be so qualified or in good standing would not have a
material adverse effect on the business, financial condition,
shareholders' equity or results of operations of the Company and its
subsidiaries taken as a whole (a "MATERIAL ADVERSE
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EFFECT"), and have all power and authority necessary to own or hold
their respective properties and to conduct the businesses in which
they are engaged; and none of the subsidiaries of the Company, other
than the Operating Subsidiary, is a "SIGNIFICANT SUBSIDIARY", as such
term is defined in Rule 405 of the Rules and Regulations.
(d) The Company had an authorized and issued capitalization as
set forth in the Prospectus as of the date stated therein, and all of
the issued shares of capital stock of the Company have been duly and
validly authorized and issued, are fully paid and non-assessable and
conform in all material respects to the description thereof contained
in the Prospectus; and all of the issued shares of capital stock of
each subsidiary of the Company have been duly and validly authorized
and issued and are fully paid and non-assessable and are owned directly
or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims.
(e) The unissued shares of the Stock to be issued and sold by
the Company to the Underwriters hereunder have been duly and validly
authorized and, when issued and delivered against payment therefor as
provided herein, will be duly and validly issued, fully paid and
non-assessable; and the Stock will conform, in all material respects,
to the description thereof contained in the Prospectus. Except as
described in the Prospectus, there are no pre-emptive or other rights
to subscribe for or to purchase, nor any restrictions upon the voting
or transfer of any shares of Common Stock pursuant to the Company's
corporate charter or by-laws or any agreement or other instrument to
which the Company is a party.
(f) This Agreement has been duly authorized, executed and
delivered by the Company.
(g) The execution, delivery and performance of this Agreement
by the Company and the consummation of the transactions contemplated
hereby and the issuance and delivery of the Stock will not conflict
with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any (i) indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party
or by which the Company or any of its subsidiaries is bound or to which
any of the property or assets of the Company or any of its subsidiaries
is subject, (ii) provisions of the charter or by-laws of the Company or
(iii) any of its subsidiaries or any statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of
their properties or assets; and except for the registration of the
Stock under the Securities Act and such consents, approvals,
authorizations, registrations or qualifications as may be required
under the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT") and applicable state securities laws or by the National
Association of Securities Dealers, Inc. in connection with the purchase
and distribution of the Stock by the Underwriters, no consent,
approval, authorization or order of, or filing or registration or
qualification of or with, any such court or governmental agency or body
is required for the execution, delivery and performance of this
Agreement by the Company and the consummation of the transactions
contemplated hereby.
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(h) There are no contracts, agreements or understandings
between the Company and any person granting such person the right
(other than rights which have been waived or satisfied) to require the
Company to file a registration statement under the Securities Act with
respect to any securities of the Company owned or to be owned by such
person or to require the Company to include such securities in the
securities registered pursuant to the Registration Statement or in any
securities being registered pursuant to any other registration
statement filed by the Company under the Securities Act.
(i) Except as described in the Registration Statement, the
Company has not sold or issued any shares of Common Stock during the
six-month period preceding the date of the Prospectus, including any
sales pursuant to Rule 144A under, or Regulations D or S of, the
Securities Act, other than shares issued pursuant to employee benefit
plans, qualified stock options plans or other employee compensation
plans or pursuant to outstanding options, rights or warrants.
(j) Neither the Company nor any of its subsidiaries has
sustained, since the date of the latest audited financial statements
included in the Prospectus, any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus; and, since such date, there has not
been any change in the capital stock or long-term debt of the Company
or any of its subsidiaries or any material adverse change, or any
development involving a prospective material adverse change, in or
affecting the business, management, financial condition, stockholders'
equity or results of operations of the Company and its subsidiaries
taken as a whole (any of which, a "MATERIAL ADVERSE CHANGE"), otherwise
than as set forth in or contemplated by the Prospectus.
(k) The financial statements (including the related notes and
supporting schedules) filed as part of the Registration Statement or
included in the Prospectus present fairly the financial condition and
results of operations of the entities purported to be shown thereby, at
the dates and for the periods indicated, and have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis throughout the periods involved.
(l) PricewaterhouseCoopers LLP, which has certified certain
financial statements of the Company, whose report appears in the
Prospectus and who have delivered the initial letter referred to in
Section 9(g) hereof, are independent public accountants as required by
the Securities Act and the Rules and Regulations.
(m) The Company and its subsidiaries own, or have valid rights
to use, all items of real and personal property which are material to
the business of the Company and its subsidiaries taken as a whole, free
and clear of all security interests, liens, claims and encumbrances
that would materially affect the value thereof or interfere with the
use made or to be made thereof by them.
(n) The Company and each of its subsidiaries own or possess
adequate licenses or other rights to use all intellectual property
rights, including patents, trademarks, service
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marks, trade names, trademark registrations, service ▇▇▇▇
registrations, copyrights and know-how necessary for the conduct of
their respective businesses and have no reason to believe that the
conduct of their respective businesses will conflict with, and have
not received any notice of any claim of conflict with, any
intellectual property rights of others.
(o) There are no legal or governmental proceedings pending to
which the Company or any of its subsidiaries is a party or of which any
property or assets of the Company or any of its subsidiaries is the
subject which, if determined adversely to the Company or any of its
subsidiaries, might have a Material Adverse Effect; and to the best of
the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others.
(p) There are no contracts or other documents which are
required to be described in the Prospectus or filed as exhibits to the
Registration Statement by the Securities Act or by the Rules and
Regulations which have not been described in the Prospectus or filed as
exhibits to the Registration Statement.
(q) No relationship, direct or indirect, exists between or
among the Company on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company on the other hand,
which is required to be described in the Prospectus which is not so
described.
(r) Since the date as of which information is given in the
Prospectus through the date hereof, and except as may otherwise be
disclosed in the Prospectus, the Company has not (i) issued or granted
any securities, (ii) incurred any liability or obligation, direct or
contingent, other than liabilities and obligations which were incurred
in the ordinary course of business, (iii) entered into any transaction
not in the ordinary course of business or (iv) declared or paid any
dividend on its capital stock.
(s) Neither the Company nor any of its subsidiaries (i) is in
violation of its corporate charter or by-laws, (ii) is in default in
any material respect, and no event has occurred which, with notice or
lapse of time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition contained
in any material indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which it is a party or by which it is
bound or to which any of its properties or assets is subject or (iii)
is in violation in any material respect of any law, ordinance,
governmental rule, regulation or court decree to which it or its
property or assets may be subject or has failed to obtain any material
license, permit, certificate, franchise or other governmental
authorization or permit necessary to the ownership of its property or
to the conduct of its business.
(t) Neither the Company nor any subsidiary is an "investment
company" within the meaning of such term under the Investment Company
Act of 1940 and the rules and regulations of the Commission thereunder.
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(u) No labor disturbance by the employees of the Company or
any of its subsidiaries exists or, to the knowledge of the Company, is
imminent which might be expected to have a Material Adverse Effect.
(v) The Company and each of its subsidiaries is in compliance
in all material respects with all presently applicable provisions of
the Employee Retirement Income Security Act of 1974, as amended,
including the regulations and published interpretations thereunder
("ERISA"); no "reportable event" (as defined in ERISA) has occurred
with respect to any "pension plan" (as defined in ERISA) for which the
Company would have any liability; the Company has not incurred and does
not expect to incur liability under (i) Title IV of ERISA with respect
to termination of, or withdrawal from, any "pension plan" or (ii)
Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended,
including the regulations and published interpretations thereunder (the
"Code"); and each "pension plan" for which the Company would have any
liability that is intended to be qualified under Section 401(a) of the
Code is so qualified in all material respects and nothing has occurred,
whether by action or by failure to act, which would cause the loss of
such qualification.
(w) The Company and each of its subsidiaries has filed all
federal, state and local income and franchise tax returns required to
be filed through the date hereof and has paid all taxes due thereon,
and no tax deficiency has been determined adversely to the Company or
any of its subsidiaries which has had (nor does the Company have any
knowledge of any tax deficiency which, if determined adversely to the
Company or any of its subsidiaries, might have) a Material Adverse
Effect.
(x) The Company and each of its subsidiaries (i) makes and
keeps accurate books and records and (ii) maintains internal accounting
controls which provide reasonable assurance that (A) transactions are
executed in accordance with management's authorization, (B)
transactions are recorded as necessary to permit preparation of its
financial statements and to maintain accountability for its assets, (C)
access to its assets is permitted only in accordance with management's
authorization and (D) the reported accountability for its assets is
compared with existing assets at reasonable intervals.
(y) Except as disclosed in the Prospectus and except as would
not, individually or in the aggregate, result in a Material Adverse
Effect, neither the Company nor any of its subsidiaries (nor, to the
knowledge of the Company, any of their predecessors in interest) is (i)
in violation of any applicable law, statute, rule, regulation,
decision, judgment, permit or order of any governmental agency or body
or any court, domestic or foreign, relating to the use, storage,
generation, manufacture, disposal or release of hazardous or toxic
substances, medical wastes or hazardous wastes (collectively,
"Environmental Laws"), (ii) owns or operates any real property
contaminated with any substance that is subject to any Environmental
Laws, or (iii) is liable for any off-site disposal or contamination
pursuant to any Environmental Laws; and the Company is not aware of any
pending investigation which might lead to such a claim. The terms
"hazardous wastes", "toxic wastes", "hazardous substances", and
"medical wastes" shall have the meanings specified in any applicable
local, state, federal and foreign laws or regulations with respect to
environmental protection.
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(z) Any certificate signed by an officer of the Company and
delivered to the Underwriters or their counsel pursuant to this
Agreement shall be deemed a representation and warranty hereunder by
the Company to each Underwriter as to the matters covered thereby.
(aa) The Company and each of its subsidiaries are insured by
insurers of recognized financial responsibility against such
losses and risks and in such amounts as are prudent and customary
in the businesses in which they are engaged; neither the Company
nor any such subsidiary has been refused any insurance coverage
sought or applied for; and neither the Company nor any such
subsidiary has any reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as
may be necessary to continue its business at a cost that would
not result in a Material Adverse Effect, except as described in
or contemplated by the Prospectus.
(bb) The Company has not distributed and, prior to the later
of (i) the First Delivery Closing Date and (ii) the completion of
the distribution of the Stock, will not distribute any offering
material in connection with the offering and sale of the Stock
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.
2. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE SELLING
STOCKHOLDERS. Each Selling Stockholder severally represents, warrants and agrees
that:
(a) The Selling Stockholder has, and immediately prior to the
First Delivery Date (as defined in Section 5 hereof) the Selling
Stockholder will have good and valid title to the shares of Stock to
be sold by the Selling Stockholder hereunder on such date, free and
clear of all liens, encumbrances, equities or claims; and upon
delivery of such shares and payment therefor pursuant hereto, good and
valid title to such shares, free and clear of all liens, encumbrances,
equities or claims, will pass to the several Underwriters.
(b) The Selling Stockholder has placed in custody under a
custody agreement (the "CUSTODY AGREEMENT" and, together with all other
similar agreements executed by the other Selling Stockholders, the
"CUSTODY AGREEMENTS") with the Company, as custodian (the "CUSTODIAN"),
for delivery under this Agreement, certificates in negotiable form
(with signature guaranteed by a commercial bank or trust company having
an office or correspondent in United States or a member firm of the New
York or American Stock Exchanges) representing the shares of Stock to
be sold by the Selling Stockholder hereunder.
(c) The Selling Stockholder has duly and irrevocably executed and
delivered a power of attorney (the "POWER OF ATTORNEY" and, together
with all other similar agreements executed by the other Selling
Stockholders, the "POWERS OF ATTORNEY") appointing the Custodian and
one or more other persons, as attorneys-in-fact, with full power of
substitution, and with full authority (exercisable by any one or more
of them) to execute and
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deliver this Agreement and to take such other action as may be
necessary or desirable to carry out the provisions hereof on behalf of
the Selling Stockholder.
(d) The Selling Stockholder has full right, power and authority
to enter into this Agreement, the Power of Attorney and the Custody
Agreement; the execution, delivery and performance of this Agreement,
the Power of Attorney and the Custody Agreement by the Selling
Stockholder and the consummation by the Selling Stockholder of the
transactions contemplated hereby and thereby will not conflict with or
result in a breach or violation of any of the terms or provisions of,
or constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Selling
Stockholder is a party or by which the Selling Stockholder is bound or
to which any of the property or assets of the Selling Stockholder is
subject, nor will such actions result in any violation of any statute
or any order, rule or regulation of any court or governmental agency
or body having jurisdiction over the Selling Stockholder or the
property or assets of the Selling Stockholder; and, except for the
registration of the Stock under the Securities Act and such consents,
approvals, authorizations, registrations or qualifications as may be
required under the Exchange Act and applicable state securities laws
in connection with the purchase and distribution of the Stock by the
Underwriters, no consent, approval, authorization or order of, or
filing or registration with, any such court or governmental agency or
body is required for the execution, delivery and performance of this
Agreement, the Power of Attorney or the Custody Agreement by the
Selling Stockholder and the consummation by the Selling Stockholder of
the transactions contemplated hereby and thereby.
(e) The Registration Statement and the Prospectus and any further
amendments or supplements to the Registration Statement or the
Prospectus will, when they become effective or are filed with the
Commission, as the case may be, do not and will not, as of the
applicable effective date (as to the Registration Statement and any
amendment thereto) and as of the applicable filing date (as to the
Prospectus and any amendment thereto) and as of the applicable filing
date (as to the Prospectus and any amendment or supplement thereto)
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; PROVIDED that no representation or
warranty is made as to information contained in or omitted from the
Registration Statement or the Prospectus in reliance upon and in
conformity with written information furnished to the Company through
the Representatives by or on behalf of any Underwriter specifically
for inclusion therein.
(f) The Selling Stockholder has no reason to believe that
the representations and warranties of the Company contained in Section
1 hereto are not materially true and correct, is familiar with the
Registration Statement and the Prospectus (as amended or supplemented)
and has no knowledge of any material fact, condition or information
not disclosed in the Registration Statement, as of the effective date,
or the Prospectus (or any amendment or supplement thereto), as of the
applicable filing date, which has adversely affected or may adversely
affect the business of the Company and is not prompted to sell shares
of Common Stock by any information concerning the Company which is not
set forth in the Registration Statement and the Prospectus.
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(g) The Selling Stockholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result in
the stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the shares of the Stock.
(h) The Selling Stockholder has not distributed and, prior to
the later of (i) the First Delivery Closing Date and (ii) the
completion of the distribution of the Stock, will not distribute any
offering material in connection with the offering and sale of the Stock
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.
3. PURCHASE OF THE STOCK BY THE UNDERWRITERS. On the basis of
the representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell 3,000,000 shares of
the Firm Stock and each Selling Stockholder hereby agrees to sell the number of
shares of the Firm Stock set forth opposite his or her name in Schedule 2
hereto, severally and not jointly, to the several Underwriters and each of the
Underwriters, severally and not jointly, agrees to purchase the number of shares
of the Firm Stock set forth opposite that Underwriter's name in Schedule 1
hereto. Each Underwriter shall be obligated to purchase from the Company, and
from each Selling Stockholder, that number of Shares of the Firm Stock which
represents the same proportion of the number of shares of the Firm Stock to be
sold by the Company, and by each Selling Stockholder, as the number of shares of
the Firm Stock set forth opposite the name of such Underwriter in Schedule 1
represents of the total number of shares of the Firm Stock to be purchased by
all of the Underwriters pursuant to this Agreement. The respective purchase
obligations of the Underwriters with respect to the Firm Stock shall be rounded
among the Underwriters to avoid fractional shares, as the Representatives may
determine.
In addition, the Selling Stockholders severally and not
jointly grant to the Underwriters an option to purchase up to an aggregate of
525,000 shares of Option Stock. Such option is granted for the purpose of
covering over-allotments in the sale of Firm Stock and is exercisable as
provided in Section 5 hereof. Shares of Option Stock shall be purchased
severally and not jointly from the Selling Stockholders in proportion to the
number of shares of Firm Stock set forth opposite the name of such Selling
Stockholder in Schedule 2 hereto for the account of the Underwriters in
proportion to the number of shares of Firm Stock set forth opposite the name of
such Underwriters in Schedule 1 hereto. The respective purchase obligations of
each Underwriter with respect to the Option Stock shall be adjusted by the
Representatives so that no Underwriter shall be obligated to purchase Option
Stock other than in 100 share amounts. The price of both the Firm Stock and any
Option Stock shall be $_____ per share.
The Company and the Selling Stockholders shall not be
obligated to deliver any of the Stock to be delivered on any Delivery Date (as
hereinafter defined), as the case may be, except upon payment for all the Stock
to be purchased on such Delivery Date as provided herein.
4. OFFERING OF STOCK BY THE UNDERWRITERS.
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Upon authorization by the Representatives of the release of
the Firm Stock, the several Underwriters propose to offer the Firm Stock for
sale upon the terms and conditions set forth in the Prospectus.
It is understood that [_________] shares of the Firm Stock
will initially be reserved by the several Underwriters for offer and sale upon
the terms and conditions set forth in the Prospectus and in accordance with the
rules and regulations of the National Association of Securities Dealers, Inc. to
employees and persons having business relationships with the Company and its
subsidiaries who have heretofore delivered to the Representatives offers to
purchase shares of Firm Stock in form satisfactory to the Representatives, and
that any allocation of such Firm Stock among such persons will be made in
accordance with timely directions received by the Representatives from the
Company; PROVIDED, that under no circumstances will the Representatives or any
Underwriter be liable to the Company or to any such person for any action taken
or omitted in good faith in connection with such offering to employees and
persons having business relationships with the Company and its subsidiaries. It
is further understood that any shares of such Firm Stock which are not purchased
by such persons will be offered by the Underwriters to the public upon the terms
and conditions set forth in the Prospectus.
5. DELIVERY OF AND PAYMENT FOR THE STOCK. Delivery of and
payment for the Firm Stock shall be made at the offices of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP,
New York, New York, at 10:00 A.M., Eastern time, on the fourth full business day
following the date of this Agreement or at such other date or place as shall be
determined by agreement between the Representatives and the Company. This date
and time are sometimes referred to as the "FIRST DELIVERY DATE." On the First
Delivery Date, the Company and the Selling Stockholders shall deliver or cause
to be delivered the Firm Stock to the Representatives for the account of each
Underwriter against payment to or upon the order of the Company and the Selling
Stockholders of the purchase price by wire transfer in immediately available
funds. The Company and the Selling Stockholders shall deliver the Firm Stock to
▇▇▇▇▇▇ Brothers Inc. through the facilities of the Depository Trust Company
("DTC") for the respective accounts of the several Underwriters. Time shall be
of the essence, and delivery at the time specified pursuant to this Agreement is
a further condition of the obligation of each Underwriter hereunder. The Company
and the Selling Stockholders shall make the certificates representing the Firm
Stock available for inspection by the Representatives at such location as shall
reasonably be requested by the Representatives in New York, New York, not later
than 2:00 P.M., Eastern time, on the business day prior to the First Delivery
Date.
The option granted in Section 3 will expire 30 days after the
date of this Agreement and may be exercised in whole or in part from time to
time by written notice being given to the Selling Stockholders and the Custodian
by the Representatives. Such notice shall set forth the aggregate number of
shares of Option Stock as to which the option is being exercised and the date
and time, as determined by the Representatives, when the shares of Option Stock
are to be delivered; PROVIDED, HOWEVER, that this date and time shall not be
earlier than the First Delivery Date nor earlier than the second business day
after the date on which the option shall have been exercised nor later than the
fifth business day after the date on which the option shall have been exercised.
The date and time the shares of Option Stock are delivered are sometimes
referred to as a "SUBSEQUENT DELIVERY DATE" and the First Delivery Date and any
Subsequent Delivery Date are sometimes each referred to as a "DELIVERY DATE".
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Delivery of and payment for the Option Stock shall be made at
the place specified in the first sentence of the first paragraph of this Section
4 (or at such other place as shall be determined by agreement between the
Representatives and the Company) at 10:00 A.M., Eastern time, on such Subsequent
Delivery Date. On such Subsequent Delivery Date, each Custodian, on behalf of
the respective Selling Stockholder, shall deliver or cause to be delivered the
Option Stock being sold by such Selling Stockholder to the Representatives for
the account of each Underwriter against payment to or upon the order of each
Selling Stockholder of the purchase price by wire transfer in immediately
available funds. Each Custodian on behalf of each Selling Stockholder shall
deliver the Option Stock to ▇▇▇▇▇▇ Brothers Inc. through the facilities of DTC
for the respective accounts of the several Underwriters. Time shall be of the
essence, and delivery at the time specified pursuant to this Agreement is a
further condition of the obligation of each Underwriter hereunder. The Custodian
to each of the Selling Stockholders shall make the certificates representing the
Option Stock available for inspection by the Representatives in New York, New
York, not later than 2:00 P.M., Eastern time, on the business day prior to such
Subsequent Delivery Date.
6. FURTHER AGREEMENTS OF THE COMPANY. The Company agrees:
(a) To prepare the Prospectus in a form approved by the
Representatives and to 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; to make no
further amendment or any supplement to the Registration Statement or to
the Prospectus except as permitted herein; to advise the
Representatives, promptly after it receives notice thereof, of the time
when any amendment to the Registration Statement or any Rule 462(b)
Registration Statement has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been filed
and to furnish the Representatives with copies thereof; to advise the
Representatives, promptly after it receives notice thereof, of the
issuance by the Commission of any stop order or of any order preventing
or suspending the use of any Preliminary Prospectus or the Prospectus,
of the suspension of the qualification of the Stock for offering or
sale in any jurisdiction, of the initiation or threatening of any
proceeding for any such purpose, or of any request by the Commission
for the amending or supplementing of the Registration Statement or the
Prospectus or for additional information; and, in the event of the
issuance of any stop order or of any order preventing or suspending the
use of any Preliminary Prospectus or the Prospectus or suspending any
such qualification, to use promptly its best efforts to obtain its
withdrawal;
(b) To furnish promptly to each of the Representatives and to
counsel for the Underwriters a signed copy of the Registration
Statement, including any Rule 462(b) Registration Statement, as
originally filed with the Commission, and each amendment thereto filed
with the Commission, including all consents and exhibits filed
therewith;
(c) To deliver promptly to the Representatives such number of
the following documents as the Representatives shall reasonably
request: (i) conformed copies of the Registration Statement, including
any Rule 462(b) Registration Statement, as originally filed with the
Commission and each amendment thereto (in each case excluding exhibits
11
other than this Agreement and any computation of per share earnings);
and (ii) each Preliminary Prospectus, the Prospectus and any amended or
supplemented Prospectus; and, if the delivery of a prospectus is
required at any time after the Effective Time in connection with the
offering or sale of the Stock or any other securities relating thereto
and if at such time any events shall have occurred as a result of which
the Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made when such Prospectus is
delivered, not misleading, or, if for any other reason it shall be
necessary to amend or supplement the Prospectus in order to comply with
the Securities Act, to notify the Representatives and, upon their
request, to prepare and furnish without charge to each Underwriter and
to any dealer in securities as many copies as the Representatives may
from time to time reasonably request of an amended or supplemented
Prospectus which will correct such statement or omission or effect such
compliance.
(d) To file promptly with the Commission any amendment to the
Registration Statement, including any filing required under Rule
462(b), or the Prospectus or any supplement to the Prospectus that may,
in the judgment of the Company or the Representatives, be required by
the Securities Act or requested by the Commission;
(e) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus or any
Prospectus pursuant to Rule 424 of the Rules and Regulations, to
furnish a copy thereof to the Representatives and counsel for the
Underwriters and obtain the consent of the Representatives to the
filing which consent shall not be unreasonably withheld;
(f) As soon as practicable after the Effective Date, to make
generally available to the Company's security holders and to deliver to
the Representatives an earnings statement of the Company and its
subsidiaries (which need not be audited) complying with Section 11(a)
of the Securities Act and the Rules and Regulations (including, at the
option of the Company, Rule 158);
(g) For a period of five years following the Effective Date,
to furnish to the Representatives and, upon request, each of the other
Underwriters, if any, copies of all materials furnished by the Company
to its shareholders generally and all public reports and all reports
and financial statements furnished by the Company to the principal
national securities exchange upon which the Common Stock may be listed
pursuant to requirements of or agreements with such exchange or to the
Commission pursuant to the Exchange Act or any rule or regulation of
the Commission thereunder;
(h) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Stock for
offering and sale under the securities laws of such jurisdictions as
the Representatives may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the
distribution of the Stock; PROVIDED THAT in connection therewith the
Company shall not be required to qualify as a foreign corporation or to
file a general consent to service of process in any jurisdiction;
12
(i) For a period of 180 days from the date of the Prospectus,
not to, directly or indirectly, (1) offer for sale, sell, pledge or
otherwise dispose of (or enter into any transaction or device which is
designed to, or could be expected to, result in the disposition by any
person at any time in the future of) any shares of Common Stock or
securities convertible into or exchangeable for Common Stock (other
than the Stock and shares of Common Stock issued pursuant to stock
option and purchase plans or other employee compensation plans existing
on the date hereof or pursuant to currently outstanding options,
warrants, convertible stock or rights that are described in the
Prospectus), or sell or grant options, rights or warrants with respect
to any shares of Common Stock or securities convertible into or
exchangeable for Common Stock (other than the grant of options pursuant
to stock option and purchase plans or other employee compensation plans
existing on the date hereof), or (2) enter into any swap or other
derivatives transaction that transfers to another, in whole or in part,
any of the economic benefits or risks of ownership of such shares of
Common Stock, whether any such transaction described in clause (1) or
(2) above is to be settled by delivery of Common Stock or other
securities, in cash or otherwise, in each case without the prior
written consent of ▇▇▇▇▇▇ Brothers Inc.; and to cause each officer and
director of the Company and each stockholder of the Company previously
specified to the Company by ▇▇▇▇▇▇ Brothers Inc. to furnish to the
Representatives, prior to the First Delivery Date, a letter or letters,
in form and substance satisfactory to counsel for the Underwriters,
pursuant to which each such person shall agree not to, directly or
indirectly, (1) offer for sale, sell, pledge or otherwise dispose of
(or enter into any transaction or device which is designed to, or could
be expected to, result in the disposition by any person at any time in
the future of) any shares of Common Stock or securities convertible
into or exchangeable for Common Stock or (2) enter into any swap or
other derivatives transaction that transfers to another, in whole or in
part, any of the economic benefits or risks of ownership of such shares
of Common Stock, whether any such transaction described in clause (1)
or (2) above is to be settled by delivery of Common Stock or other
securities, in cash or otherwise, in each case for a period of 180 days
from the date of the Prospectus, without the prior written consent of
▇▇▇▇▇▇ Brothers Inc.;
(j) Prior to the Effective Date, to apply for the inclusion of
the Stock on the Nasdaq National Market System and to use its best
efforts to complete that listing, subject only to official notice of
issuance, prior to the First Delivery Date;
(k) To apply the net proceeds from the sale of the Stock
being sold by the Company as set forth in the Prospectus; and
(l) To take such steps as shall be necessary to ensure that
neither the Company nor any subsidiary shall become an "investment
company" within the meaning of such term under the Investment Company
Act of 1940 and the rules and regulations of the Commission thereunder.
7. FURTHER AGREEMENTS OF THE SELLING STOCKHOLDERS. Each Selling
Stockholder agrees:
13
(a) For a period of 180 days from the date of the
Prospectus, not to, directly or indirectly, (1) offer for sale,
sell, pledge or otherwise dispose of (or enter into any transaction
or device which is designed to, or could be expected to, result in
the disposition by any person at any time in the future of any
shares of Common Stock or securities convertible into or
exchangeable for Common stock (other than the Stock) or (2) enter
into any swap or other derivatives transaction that transfers to
another, in whole or in part, any of the economic benefits or risks
of ownership of such shares of Common Stock, whether any such
transaction described in clause (1) or (2) above is to be settled
by delivery of Common Stock or other securities, in cash or
otherwise, in each case without the prior written consent of ▇▇▇▇▇▇
Brothers Inc.
(b) That the Stock to be sold by the Selling Stockholder
hereunder, which is represented by the certificates held in custody
for the Selling Stockholder, is subject to the interest of the
Underwriters and the other Selling Stockholders thereunder, that
the arrangements made by the Selling Stockholder for such custody
are to that extent irrevocable, and that the obligations of the
Selling Stockholder hereunder shall not be terminated by any act of
the Selling Stockholder, by operation of law, by the death or
incapacity of any individual Selling Stockholder or, in the case of
a trust, by the death or incapacity of any executor or trustee or
the termination of such trust, or the occurrence of any other event.
(c) To deliver to the Representatives prior to the First
Delivery Date a properly completed and executed United States Treasury
Department Form W-8 (if the Selling Stockholder is a non-United States
person or Form W-9 (if the Selling Stockholder is a United States
person.)
(d) The Selling Stockholder will not take, directly or
indirectly, any action designed to cause or result in, or that has
constituted or might reasonably be expected to constitute, the
stabilization or manipulation of the price of any securities of the
Company.
8. EXPENSES. The Company agrees to pay (a) the costs incident
to the authorization, issuance, sale and delivery of the Stock and any taxes
payable in that connection; (b) the costs incident to the preparation, printing
and filing under the Securities Act of the Registration Statement and any
amendments and exhibits thereto; (c) the costs of distributing the Registration
Statement as originally filed and each amendment thereto and any post-effective
amendments thereof (including, in each case, exhibits), any Preliminary
Prospectus, the Prospectus and any amendment or supplement to the Prospectus,
all as provided in this Agreement; (d) the costs of producing and distributing
this Agreement and any other related documents in connection with the offering,
purchase, sale and delivery of the Stock; (e) the filing fees incident to
securing any required review by the National Association of Securities Dealers,
Inc. of the terms of sale of the Stock; (f) any applicable listing or other
fees; (g) the fees and expenses of qualifying the Stock under the securities
laws of the several jurisdictions as provided in Section 6(h) and of preparing,
printing and distributing a Blue Sky Memorandum (including related fees and
expenses of counsel to the Underwriters); (h) the costs of delivering and
distributing the Custody Agreements and Powers of Attorney; (i) all costs and
expenses of the Underwriters, including the fees and disbursements of counsel
for the underwriters, incident to the offer and sale of shares of the Stock by
the Underwriters to employees and persons having business relationships with the
Company and
14
its subsidiaries, as described in Section 4; and (j) all other costs
and expenses incident to the performance of the obligations of the Company and
the Selling Stockholders under this Agreement; PROVIDED THAT, except as provided
in this Section 8 and in Section 13 the Underwriters shall pay their own costs
and expenses, including the costs and expenses of their counsel, any transfer
taxes on the Stock which they may sell and the expenses of advertising any
offering of the Stock made by the Underwriters.
9. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The respective
obligations of the Underwriters hereunder are subject to the accuracy, when made
and on each Delivery Date, of the representations and warranties of the Company
and the Selling Stockholders contained herein, to the performance by the Company
and the Selling Stockholders of their respective obligations hereunder, and to
each of the following additional terms and conditions:
(a) The Prospectus shall have been timely filed with the
Commission in accordance with Section 6(a); no stop order suspending
the effectiveness of the Registration Statement or any part thereof
shall have been issued and no proceeding for that purpose shall have
been initiated or threatened by the Commission; and any request of the
Commission for inclusion of additional information in the Registration
Statement or the Prospectus or otherwise shall have been complied with.
(b) No Underwriter shall have discovered and disclosed to the
Company on or prior to such Delivery Date that the Registration
Statement or the Prospectus or any amendment or supplement thereto
contains an untrue statement of a fact which, in the opinion of ▇▇▇▇▇,
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP, counsel for the Underwriters, is material or
omits to state a fact which, in the opinion of such counsel, is
material and is required to be stated therein or is necessary to make
the statements therein not misleading.
(c) All corporate proceedings and other legal matters incident
to the authorization, form and validity of this Agreement, the Custody
Agreements, the Powers of Attorney, the Stock, the Registration
Statement and the Prospectus, and all other legal matters relating to
this Agreement and the transactions contemplated hereby shall be
reasonably satisfactory in all material respects to counsel for the
Underwriters, and the Company and the Selling Stockholders shall have
furnished to such counsel all documents and information that they may
reasonably request to enable them to pass upon such matters.
(d) ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP shall have furnished to the
Representatives its written opinion, as counsel to the Company,
addressed to the Underwriters and dated such Delivery Date, in form and
substance reasonably satisfactory to the Representatives, to the effect
that:
(i) The Company, the Operating Subsidiary and CVC Process
Solutions (the Operating Subsidiary and CVC Process
Solutions, together, the "Designated Subsidiaries") have
been duly incorporated and are validly existing as
corporations in good standing under the laws of their
respective jurisdictions of incorporation, are duly
qualified to do business and are in good standing as foreign
corporations in each jurisdiction in which their respective
ownership or lease of property or the conduct of their
respective
15
businesses requires such qualification except where the
failure to be so qualified or not in good standing would not
have a Material Adverse Effect and have all power and
authority necessary to own, lease or operate their
respective properties and conduct the businesses in which
they are engaged as described in the Prospectus and, to such
counsel's knowledge, the Designated Subsidiaries and
Commonwealth Scientific Corporation are the only
subsidiaries of the Company;
(ii) The Company has an authorized and issued capitalization
as set forth in the Prospectus as of the date stated
therein, and all of the issued shares of capital stock of
the Company (including the shares of Stock being delivered
by the Company on the Delivery Date) have been duly and
validly authorized and issued, are fully paid and
non-assessable, and conform, in all material respects, to
the description thereof contained in the Prospectus; all of
the issued shares of capital stock of each of the Designated
Subsidiaries of the Company have been duly and validly
authorized and issued and are fully paid, non-assessable and
to the knowledge of such counsel are owned directly or
indirectly by the Company, free and clear of all security
interests, liens, encumbrances, equities or claims;
(iii) Except as described in the Prospectus, there are no
preemptive or other rights to subscribe for or to purchase,
nor any restriction upon the voting or transfer of, any
shares of the Stock pursuant to the Company's corporate
charter or by-laws or any agreement or other instrument
required to be filed as an exhibit to the Registration
Statement;
(iv) Other than as set forth in the Prospectus, such counsel
does not know of any legal or governmental proceedings
pending or threatened, to which the Company or any of its
subsidiaries is a party or of which any property or assets
of the Company or any of its subsidiaries is the subject
that are required to be described in any Registration
Statement or the Prospectus and are not described therein;
(v) The Registration Statement was declared effective under
the Securities Act as of the date and time specified in such
opinion, the Prospectus was filed with the Commission
pursuant to the subparagraph of Rule 424(b) of the Rules and
Regulations specified in such opinion on the date specified
therein and to the knowledge of such counsel no stop order
suspending the effectiveness of the Registration Statement
has been issued and no proceeding for that purpose is
pending or threatened by the Commission;
(vi) The Registration Statement, including any Rule 462(b)
Registration Statement, and the Prospectus and any further
amendments or supplements thereto made by the Company prior
to such Delivery Date (other than the financial statements
and related schedules therein, as to which such counsel need
express no opinion) comply as to form in all material
respects with the requirements of the Securities Act and the
Rules and Regulations;
16
(vii) To the best of such counsel's knowledge, there are no
contracts or other documents which are required to be
described in the Prospectus or filed as exhibits to the
Registration Statement by the Securities Act or by the Rules
and Regulations which have not been described or filed as
exhibits to the Registration Statement;
(viii) This Agreement has been duly authorized, executed and
delivered by the Company;
(ix) The issue and sale of the shares of Stock being
delivered on such Delivery Date by the Company and the
compliance by the Company with all of the provisions of this
Agreement and the consummation of the transactions
contemplated hereby will not conflict with or result in a
breach or violation of any statute or any order, rule or
regulation known to such counsel of any court or
governmental agency or body having jurisdiction over the
Company or any of its Designated Subsidiaries or any of
their properties or assets (except that such counsel need
express no opposition as to state securities laws), any of
the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument known to such counsel to which
the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to
which any of the property or assets of the Company or any of
its subsidiaries is subject which is material to the
business of the Company and its subsidiaries, taken as a
whole, nor will such actions result in any violation of the
provisions of the charter or by-laws of the Company or any
of its subsidiaries; and, except for the registration of the
Stock under the Securities Act and such consents, approvals,
authorizations, registrations or qualifications as may be
required under the Exchange Act and applicable state
securities laws or by the National Association of Securities
Dealers, Inc., no consent, approval, authorization or order
of, or filing or registration with, any such court or
governmental agency or body is required for the execution,
delivery and performance of this Agreement by the Company
and the consummation of the transactions contemplated
hereby;
(x) The information contained in the Prospectus under the
captions "Risk Factors Certain Factors May Delay or Prevent
a Change of Control Transaction," "Management Stock Option
Plans," "Management - Pension Plan," "Description of Capital
Stock" and "Shares Eligible for Future Sale" to the extent
that it constitutes matters of law, summaries of legal
matters, description of the Company's charter and by-laws or
legal proceedings, or legal conclusions are accurate and
complete in all material respects; and
(xi) To the best of such counsel's knowledge, there are no
contracts, agreements or understandings between the Company
and any person
17
granting such person the right (other than rights which hav
e been waived or satisfied) to require the Company to file a
registration statement under the Securities Act with respect
to any securities of the Company owned or to be owned by
such person or to require the Company to include such
securities in the securities registered pursuant to the
Registration Statement or in any securities being registered
pursuant to any other registration statement filed by the
Company under the Securities Act.
In rendering such opinion, such counsel may state that its opinion is limited
to matters governed by the Federal laws of the United States of America, the
laws of the State of New York and the General Corporation Law of the State of
Delaware and that such counsel is not admitted in the State of Delaware. Such
counsel shall also have furnished to the Representatives a written statement,
addressed to the Underwriters and dated such Delivery Date, in form and
substance satisfactory to the Representatives, to the effect that (x) such
counsel has acted as counsel to the Company in connection with certain recent
financings of the Company and the acquisition by the Company of the
Commonwealth Subsidiary (as defined below), and has acted as counsel to the
Company in connection with the preparation of the Registration Statement, and
(y) based on the foregoing, no facts have come to the attention of such
counsel which lead it to believe that the Registration Statement, as of the
Effective Date, contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary in order
to make the statements therein not misleading, or that the Prospectus
contains any untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading when they were filed with the Commission. The foregoing
opinion and statement may be qualified by a statement to the effect that such
counsel does not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement or the
Prospectus, except as set forth in subparagraph (x) above.
(e) Hunton & ▇▇▇▇▇▇▇▇ shall have furnished to the
Representatives its written opinion, as ▇▇▇▇▇▇▇ counsel to the
Company, addressed to the Underwriters and dated such Delivery Date,
in form and substance reasonably satisfactory to the
Representatives, to the effect that:
(i) Commonwealth Scientific Corporation (the
"Commonwealth Subsidiary") has been duly incorporated and
is validly existing as a corporation in good standing
under the laws of the State of Virginia, is duly
qualified to do business and is in good standing as a
foreign corporation in each jurisdiction in which its
ownership or lease of property or the conduct of its
business requires such qualification and has all power
and authority necessary to own, lease or operate its
properties and conduct the business in which it has
engaged;
(ii) _____________ all of the issued shares of capital
stock of he Commonwealth Subsidiary have been duly and
validly authorized nd issued, are
18
fully paid and non-assessable and are owned directly by
the Company, free and clear of all security interests,
liens, encumbrances, equities or claims;
(iii) To the best of such counsel's knowledge, there are
no legal or governmental proceedings pending to which the
Commonwealth Subsidiary is a party or of which any
property or assets of the Commonwealth Subsidiary is the
subject and, to the best of such counsel's knowledge, no
such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(iv) The issue and sale of the shares of Stock being
delivered on such Delivery Date by the Company and the
compliance by the Company with all of the provisions of
this Agreement and the consummation of the transactions
contemplated hereby will not conflict with or result in a
breach or violation of any of the terms or provisions of,
or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or
instrument known to such counsel to which the
Commonwealth Subsidiary is a party or by which the
Commonwealth Subsidiary is bound or to which any of the
property or assets of the Commonwealth Subsidiary is
subject, nor will such actions result in any violation of
the provisions of the charter or by-laws of the
Commonwealth Subsidiary or any statute or any order, rule
or regulation known to such counsel of any court or
governmental agency or body having jurisdiction over the
Commonwealth Subsidiary or any of their properties or
assets;
(f) ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ Freidenrich LLP shall have furnished to the
Representatives its written opinion, as intellectual property counsel
to the Company, addressed to the Underwriters and dated such Delivery
Date, in form and substance reasonably satisfactory to the
Representatives, which shall include but not be limited to the
statement that such counsel is familiar with the technology used by the
Company in its business and the manner of its use thereof and has read
the Registration Statement and the Prospectus, including particularly
the portions of the Registration Statement and the Prospectus referring
to patents, trade secrets, trademarks, service marks or other
proprietary information or materials.
(g) The counsel for each of the Selling Stockholders shall
each have furnished to the Representatives its written opinion, as
counsel to the Selling Stockholder for whom it is acting as counsel,
addressed to the Underwriters and dated the First Delivery Date, in
form and substance reasonably satisfactory to the Representatives, to
the effect that:
(i) Such Selling Stockholder has full right, power and
authority to enter into this Agreement, the Power of
Attorney and the Custody Agreement; the execution,
delivery and performance of this Agreement by such
Selling Stockholder and the consummation by such Selling
Stockholder of the transactions contemplated hereby and
thereby will not conflict with or result in a breach or
violation of any of the terms or provisions of, or
constitute a default under, any statute, any indenture,
mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which
such Selling Stockholder is a party or by which such
Selling Stockholder is bound or to which any of the
property or assets of such Selling Stockholder is
subject, nor will such actions result in any violation of
any statute or
19
any order, rule or regulation known to such counsel of any
court or governmental agency or body having jurisdiction
over such Selling Stockholder or the property or assets
of such Selling Stockholder; and, except for the
registration of the Stock under the Securities Act and
such consents, approvals, authorizations, registrations
or qualifications as may be required under the Exchange
Act and applicable state securities laws in connection
with the purchase and distribution of the Stock by the
Underwriters, no consent, approval, authorization or
order of, or filing or registration with, any such court
or governmental agency or body is required for the
execution, delivery and performance of this Agreement,
the Power of Attorney or the Custody Agreement by such
Selling Stockholder and the consummation by such Selling
Stockholder of the transactions contemplated hereby and
thereby;
(ii) This Agreement has been duly executed and delivered
by or on behalf of such Selling Stockholder;
(iii) A Power-of-Attorney and a Custody Agreement have
been duly executed and delivered by such Selling
Stockholder and constitute valid and binding agreements
of such Selling Stockholder, enforceable in accordance
with their respective terms;
(iv) Immediately prior to the First Delivery Date, such
Selling Stockholder had good and valid title to the
shares of Stock to be sold by such Selling Stockholder
under this Agreement, free and clear of all liens,
encumbrances, equities or claims, and full right, power
and authority to sell, assign, transfer and deliver such
shares to be sold by such Selling Stockholder hereunder;
and
(v) Good and valid title to the shares of Stock to be
sold by such Selling Stockholder under this Agreement,
free and clear of all liens, encumbrances, equities or
claims, has been transferred to each of the several
Underwriters.
In rendering such opinion, such counsel may (i) state that its opinion
is limited to matters governed by the Federal laws of the United States
of America, the laws of the State of New York and the General
Corporation Law of the State of Delaware and that such counsel is not
admitted in the Sate of Delaware and (ii) rendering the opinion in
Section 9(g)(iv) above, rely upon a certificate of such Selling
Stockholder in respect of matters of fact as to ownership of and liens,
encumbrances, equities or claims on the shares of Stock sold by such
Selling Stockholder, PROVIDED that such counsel shall furnish copies
thereof to the Representatives and state that it believes that both the
Underwriters and it are justified in relying upon such certificate.
Such counsel shall also have furnished to the Representatives a written
statement, addressed to the Underwriters and dated the First Delivery
Date, in form and substance satisfactory to the Representatives, to the
effect that (x) such counsel has acted as counsel to such Selling
Stockholder in connection with the preparation of the Registration
Statement, and (y) based on the foregoing, no facts have come to the
attention of such counsel which lead it to believe that the
Registration Statement, as of the Effective Date, contained any untrue
statement of a material fact relating to such Selling Stockholder or
omitted to state such a material fact required to be stated therein or
necessary in order to make the statements therein not misleading, or
that the Prospectus contains any untrue
20
statement of a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The
foregoing opinion and statement may be qualified by a statement to the
effect that such counsel does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus.
(f) The Representatives shall have received from ▇▇▇▇▇,
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP, counsel for the Underwriters, such opinion or
opinions, dated such Delivery Date, with respect to the issuance and
sale of the Stock, the Registration Statement, the Prospectus and other
related matters as the Representatives may reasonably require, and the
Company shall have furnished to such counsel such documents as they
reasonably request for the purpose of enabling them to pass upon such
matters.
(g) At the time of execution of this Agreement, the
Representatives shall have received from PricewaterhouseCoopers LLP a
letter, in form and substance satisfactory to the Representatives,
addressed to the Underwriters and dated the date hereof (i) confirming
that they are independent public accountants within the meaning of the
Securities Act and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01 of
Regulation S-X of the Commission, (ii) stating, as of the date hereof
(or, with respect to matters involving changes or developments since
the respective dates as of which specified financial information is
given in the Prospectus, as of a date not more than five days prior to
the date hereof), the conclusions and findings of such firm with
respect to the financial information and other matters ordinarily
covered by accountants' "comfort letters" to underwriters in connection
with registered public offerings.
(h) With respect to the letter of PricewaterhouseCoopers LLP
referred to in the preceding paragraph and delivered to the
Representatives concurrently with the execution of this Agreement (the
"INITIAL LETTER"), the Company shall have furnished to the
Representatives a letter (the "BRING-DOWN LETTER") of such accountants,
addressed to the Underwriters and dated such Delivery Date (i)
confirming that they are independent public accountants within the
meaning of the Securities Act and are in compliance with the applicable
requirements relating to the qualification of accountants under Rule
2-01 of Regulation S-X of the Commission, (ii) stating, as of the date
of the bring-down letter (or, with respect to matters involving changes
or developments since the respective dates as of which specified
financial information is given in the Prospectus, as of a date not more
than five days prior to the date of the bring-down letter), the
conclusions and findings of such firm with respect to the financial
information and other matters covered by the initial letter and (iii)
confirming in all material respects the conclusions and findings set
forth in the initial letter.
(i) The Company shall have furnished to the Representatives a
certificate, dated such Delivery Date, of its Chairman of the Board,
its President or a Vice President and its chief financial officer
stating that:
(i) The representations, warranties and agreements of the
Company in Section 1 are true and correct as of such
Delivery Date; the Company has
21
complied with all its agreements contained herein; and the
conditions set forth in Sections 9(a) and 9(k) have been
fulfilled; and
(ii) They have carefully examined the Registration Statement
and the Prospectus and, in their opinion (A) as of the
Effective Date, the Registration Statement and Prospectus
did not include any untrue statement of a material fact and
did not omit to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading, and (B) since the Effective Date no event has
occurred which should have been set forth in a supplement or
amendment to the Registration Statement or the Prospectus.
(j) Each Selling Stockholder (or the Custodian or one or more
attorneys-in-fact on behalf of the Selling Stockholders) shall have
furnished to the Representatives on the First Delivery Date a
certificate, dated the First Delivery Date, signed by, or on behalf of,
the Selling Stockholder (or the Custodian or one or more
attorneys-in-fact) stating that the representations, warranties and
agreements of the Selling Stockholder contained herein are true and
correct as of the First Delivery Date and that the Selling Stockholder
has complied with all agreements contained herein to be performed by
the Selling Stockholder at or prior to the First Delivery Date.
(k) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
included in the Prospectus any loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in
the Prospectus or (ii) since such date there shall not have been any
change in the capital stock or long-term debt of the Company or any of
its subsidiaries or any Material Adverse Change, otherwise than as set
forth or contemplated in the Prospectus, the effect of which, in any
such case described in clause (i) or (ii), is, in the judgment of the
Representatives, so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Stock being delivered on such Delivery Date on the terms and in the
manner contemplated in the Prospectus.
(l) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in
securities generally on the New York Stock Exchange or the American
Stock Exchange or in the over-the-counter market, or trading in any
securities of the Company on any exchange or in the over-the-counter
market, shall have been suspended or minimum prices shall have been
established on any such exchange or such market by the Commission, by
such exchange or by any other regulatory body or governmental authority
having jurisdiction, (ii) a banking moratorium shall have been declared
by Federal or state authorities, (iii) the United States shall have
become engaged in hostilities, there shall have been an escalation in
hostilities involving the United States or there shall have been a
declaration of a national emergency or war by the United States or (iv)
there shall have occurred such a material adverse change in general
economic, political or financial conditions (or the effect of
international conditions on the financial markets in the United States
shall be such) as to make it, in the judgment of a majority in interest
of the
22
several Underwriters, impracticable or inadvisable to proceed with the
public offering or delivery of the Stock being delivered on such
Delivery Date on the terms and in the manner contemplated in the
Prospectus.
(m) The Nasdaq National Market System shall have approved the
Stock for inclusion, subject only to official notice of issuance.
All opinions, letters, evidence and certificates mentioned
above or elsewhere in this Agreement shall be deemed to be in
compliance with the provisions hereof only if they are in form and
substance reasonably satisfactory to counsel for the Underwriters.
10. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company and the Operating Subsidiary, jointly and
severally, shall indemnify and hold harmless each Underwriter, its
officers and employees and each person, if any, who controls any
Underwriter within the meaning of the Securities Act, from and against
any loss, claim, damage or liability, joint or several, or any action
in respect thereof (including, but not limited to, any loss, claim,
damage, liability or action relating to purchases and sales of Stock),
to which that Underwriter, officer, employee or controlling person may
become subject, under the Securities Act or otherwise, insofar as such
loss, claim, damage, liability or action arises out of, or is based
upon, (i) any untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus or in any amendment or supplement thereto,
(ii) the omission or alleged omission to state in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or in any
amendment or supplement thereto, any material fact required to be
stated therein or necessary to make the statements therein not
misleading or (iii) any act or failure to act or any alleged act or
failure to act by any Underwriter in connection with, or relating in
any manner to, the Stock or the offering contemplated hereby, and which
is included as part of or referred to in any loss, claim, damage,
liability or action arising out of or based upon matters covered by
clause (i) or (ii) above (PROVIDED THAT neither the Company nor the
Operating Subsidiary shall be liable under this clause (iii) to the
extent that it is determined in a final judgment by a court of
competent jurisdiction that such loss, claim, damage, liability or
action resulted from any such acts or failures to act undertaken or
omitted to be taken by such Underwriter through its gross negligence or
willful misconduct), and shall reimburse each Underwriter and each such
officer, employee or controlling person promptly upon demand for any
legal or other expenses reasonably incurred by that Underwriter,
officer, employee or controlling person in connection with
investigating or defending or preparing to defend against any such
loss, claim, damage, liability or action as such expenses are incurred;
PROVIDED, HOWEVER, that neither the Company nor the Operating
Subsidiary shall be liable in any such case to the extent that any such
loss, claim, damage, liability or action arises out of, or is based
upon, any untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or in any such amendment or supplement, in
reliance upon and in conformity with written information concerning
such Underwriter furnished to the Company through the Representatives
by or on behalf of any Underwriter specifically for inclusion therein,
which information consists solely of the information specified in
Section 10(f); and PROVIDED, FURTHER, that the neither
23
the Company nor the Operating Subsidiary shall be liable to any
Underwriter under the indemnity agreement in this subsection with
respect to any Preliminary Prospectus to the extent that any such
loss, claim, damage, liability or any action in respect thereof of
such Underwriter results from the fact that such Underwriter sold
Stock to a person as to whom it shall be established that there was
not sent or given, at or prior to the written confirmation of such
sale, a copy of the Prospectus or of the Prospectus as then amended or
supplemented in any case where such delivery is required by the
Securities Act if the Company has previously furnished copies thereof
in sufficient quantity to such Underwriter and the loss, claim, damage
or liability of such Underwriter results from an untrue statement or
omission of a material fact contained in the Preliminary Prospectus
which was (i) identified to such Underwriter at or prior to the
earlier of the filing with the Commission or the furnishing to such
Underwriter of the Prospectus and (ii) corrected in the Prospectus or
in the Prospectus as then amended or supplemented. The foregoing
indemnity agreement is in addition to any liability which the Company
may otherwise have to any Underwriter or to any officer, employee or
controlling person of that Underwriter.
(b) The Selling Stockholders, severally in proportion to the
number of shares of stock to be sold by each of them hereunder, shall
indemnify and hold harmless each Underwriter, its officers and
employees, and each person, if any, who controls any Underwriter within
the meaning of the Securities Act, from and against any loss, claim,
damage or liability, joint or several, or any action in respect thereof
(including, but not limited to, any loss, claim, damage, liability or
action relating to purchases and sales of Stock), to which that
Underwriter, officer, employee or controlling person may become
subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon, (i)
any untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement or
the Prospectus or in any amendment or supplement thereto or (ii) the
omission or alleged omission to state in any Preliminary Prospectus,
Registration Statement or the Prospectus, or in any amendment or
supplement thereto, any material fact required to be stated therein or
necessary to make the statements therein not misleading, and shall
reimburse each Underwriter, its officers and employees and each such
controlling person for any legal or other expenses reasonably incurred
by that Underwriter, its officers and employees or controlling person
in connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action as such
expenses are incurred; PROVIDED, HOWEVER, that the Selling Stockholders
shall not be liable in any such case to the extent that any such loss,
claim, damage, liability or action arises out of, or is based upon, any
untrue statement or alleged untrue statement or omission or alleged
omission made in any Preliminary Prospectus, the Registration Statement
or the Prospectus or in any such amendment or supplement in reliance
upon and in conformity with written information concerning such
Underwriter furnished to the Company through the Representatives by or
on behalf of any Underwriter specifically for inclusion therein which
information consists solely of the information specified in Section
10(f) and PROVIDED, FURTHER, that the obligations of each Selling
Stockholder hereunder shall be limited to an amount equal to the
proceeds to such Selling Stockholder of Stock sold as contemplated
herein. The foregoing indemnity agreement is in addition to any
liability which the Selling Stockholders may otherwise have to any
Underwriter or any officer, employee or controlling person of that
Underwriter.
24
(c) Each Underwriter, severally and not jointly, shall
indemnify and hold harmless the Company, its officers and employees,
each of its directors (including any person who, with his or her
consent, is named in the Registration Statement as about to become a
director of the Company), the Operating Subsidiary and each person, if
any, who controls the Company or the Operating Subsidiary within the
meaning of the Securities Act, from and against any loss, claim, damage
or liability, joint or several, or any action in respect thereof, to
which the Company, the Operating Subsidiary or any such director,
officer or controlling person may become subject, under the Securities
Act or otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus or
in any amendment or supplement thereto, or (ii) the omission or alleged
omission to state in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or in any amendment or supplement thereto,
or in any Blue Sky Application any material fact required to be stated
therein or necessary to make the statements therein not misleading, but
in each case only to the extent that the untrue statement or alleged
untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information concerning such
Underwriter furnished to the Company through the Representatives by or
on behalf of that Underwriter specifically for inclusion therein, and
shall reimburse the Company, the Operating Subsidiary, and any such
director, officer or controlling person for any legal or other expenses
reasonably incurred by the Company, the Operating Subsidiary or any
such director, officer or controlling person in connection with
investigating or defending or preparing to defend against any such
loss, claim, damage, liability or action as such expenses are incurred.
The foregoing indemnity agreement is in addition to any liability which
any Underwriter may otherwise have to the Company or any such director,
officer, employee or controlling person.
(d) Promptly after receipt by an indemnified party under this
Section 10 of notice of any claim or the commencement of any action,
the indemnified party shall, if a claim in respect thereof is to be
made against the indemnifying party under this Section 10, notify the
indemnifying party in writing of the claim or the commencement of that
action; PROVIDED, HOWEVER, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have under
this Section 10 except to the extent it has been materially prejudiced
by such failure and, PROVIDED FURTHER, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may
have to an indemnified party otherwise than under this Section 10. If
any such claim or action shall be brought against an indemnified party,
and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that
it wishes, jointly with any other similarly notified indemnifying
party, to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume
the defense of such claim or action, the indemnifying party shall not
be liable to the indemnified party under this Section 10 for any legal
or other expenses subsequently incurred by the indemnified party in
connection with the defense thereof other than reasonable costs of
investigation. PROVIDED, HOWEVER, that the Representatives shall have
the right to employ counsel to represent jointly the Representatives
and those other Underwriters and their respective
25
officers, employees and controlling persons who may be subject to
liability arising out of any claim in respect of which indemnity may
be sought by the Underwriters against the Company, the Operating
Subsidiary or any Selling Stockholder under this Section 10 if, in the
reasonable judgment of the Representatives, it is advisable for the
Representatives and those Underwriters, officers, employees and
controlling persons to be jointly represented by separate counsel, and
in that event the fees and expenses of such separate counsel shall be
paid by the Company, the Operating Subsidiary or Selling Stockholders,
as the case may be. No indemnifying party shall (i) without the prior
written consent of the indemnified parties (which consent shall not be
unreasonably withheld), settle or compromise or consent to the entry
of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified
parties are actual or potential parties to such claim or action)
unless such settlement, compromise, consent or judgment (A) includes
an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding, and (B) does
not include a statement as to or an admission of fault, culpability or
failure to act by or on behalf of any indemnified party, or (ii) be
liable for any settlement of any such action effected without its
written consent (which consent shall not be unreasonably withheld),
but if settled with the consent of the indemnifying party or if there
be a final judgment for the plaintiff in any such action, the
indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of
such settlement or judgment.
(e) If the indemnification provided for in this Section 10
shall for any reason be unavailable to or insufficient to hold harmless
an indemnified party under Section 10(a), 10(b) or 10(c) in respect of
any loss, claim, damage or liability, or any action in respect thereof,
referred to therein, then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or
payable by such indemnified party as a result of such loss, claim,
damage or liability, or action in respect thereof, (i) in such
proportion as shall be appropriate to reflect the relative benefits
received by the Company, the Operating Subsidiary and the Selling
Stockholders on the one hand and the Underwriters on the other hand
from the offering of the Stock or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion
as is appropriate to reflect not only the relative benefits referred to
in clause (i) above but also the relative fault of the Company, the
Operating Subsidiary and the Selling Stockholders on the one hand and
the Underwriters on the other hand with respect to the statements or
omissions which resulted in such loss, claim, damage or liability, or
action in respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by the Company, the
Operating Subsidiary and the Selling Stockholders on the one hand and
the Underwriters on the other hand with respect to such offering shall
be deemed to be in the same proportion as the total net proceeds from
the offering of the Stock purchased under this Agreement (before
deducting expenses) received by the Company, the Operating Subsidiary
and the Selling Stockholders, on the one hand, and the total
underwriting discounts and commissions received by the Underwriters
with respect to the shares of the Stock purchased under this Agreement,
on the other hand, bear to the total gross proceeds from the offering
of the shares of the Stock under this Agreement, in each case as set
forth in the table on the cover page of the Prospectus. The relative
fault shall be determined by reference to whether the untrue or alleged
untrue statement of a material fact
26
or omission or alleged omission to state a material fact relates to
information supplied by the Company, the Operating Subsidiary and the
Selling Stockholders on the one hand or the Underwriters on the other
hand, the intent of the parties and their relative knowledge, access
to information and opportunity to correct or prevent such statement or
omission. The Company, the Operating Subsidiary, the Selling
Stockholders and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this Section 10 were to be
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 into account the equitable
considerations referred to herein. The amount paid or payable by an
indemnified party as a result of the loss, claim, damage or liability,
or action in respect thereof, referred to above in this Section 10
shall be deemed to include, for purposes of this Section 10(d), any
legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this Section 10(d), no
Underwriter shall be required to contribute any amount in excess of
the amount by which the total price at which the Stock underwritten by
it and distributed to the public was offered to the public exceeds the
amount of any damages which such Underwriter has otherwise paid or
become liable to pay by reason of any untrue or alleged untrue
statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute as provided in this Section
10(e) are several in proportion to their respective underwriting
obligations and not joint.
(f) The Underwriters severally confirm that the following
statements are correct and constitute the only information concerning
such Underwriters furnished in writing to the Company by or on behalf
of the Underwriters specifically for inclusion in the Registration
Statement and the Prospectus: (i) the statements with respect to the
public offering of the Stock by the Underwriters set forth on the cover
page of the Prospectus and (ii) the statements concerning concessions,
allowances and reallowances and stabilization and over-allotment set
forth under the caption "Underwriting" in the Prospectus.
11. DEFAULTING UNDERWRITERS.
If, on either Delivery Date, any Underwriter defaults in the
performance of its obligations under this Agreement, the remaining
non-defaulting Underwriters shall be obligated to purchase the Stock which the
defaulting Underwriter agreed but failed to purchase on such Delivery Date in
the respective proportions which the number of shares of the Firm Stock set
opposite the name of each remaining non-defaulting Underwriter in Schedule 1
hereto bears to the total number of shares of the Firm Stock set opposite the
names of all the remaining non-defaulting Underwriters in Schedule 1 hereto;
PROVIDED, HOWEVER, that the remaining non-defaulting Underwriters shall not be
obligated to purchase any of the Stock on such Delivery Date if the total number
of shares of the Stock which the defaulting Underwriter or Underwriters agreed
but failed to purchase on such date exceeds 9.09% of the total number of shares
of the Stock to be purchased on such Delivery Date, and any remaining
non-defaulting Underwriter shall not be obligated to purchase more than 110% of
the number of shares of the Stock which it agreed to purchase on such Delivery
Date pursuant to
27
the terms of Section 2. If the foregoing maximums are exceeded, the remaining
non-defaulting Underwriters, or those other underwriters satisfactory to the
Representatives who so agree, shall have the right, but shall not be obligated,
to purchase, in such proportion as may be agreed upon among them, all the Stock
to be purchased on such Delivery Date. If the remaining Underwriters or other
underwriters satisfactory to the Representatives do not elect to purchase the
shares which the defaulting Underwriter or Underwriters agreed but failed to
purchase on such Delivery Date, this Agreement (or, with respect to the
Subsequent Delivery Date, the obligation of the Underwriters to purchase, and of
the Selling Stockholders to sell, the Option Stock) shall terminate without
liability on the part of any non-defaulting Underwriter or the Company or the
Selling Stockholders, except that the Company will continue to be liable for the
payment of expenses to the extent set forth in Sections 8 and 13. As used in
this Agreement, the term "UNDERWRITER" includes, for all purposes of this
Agreement unless the context requires otherwise, any party not listed in
Schedule 1 hereto who, pursuant to this Section 11, purchases Firm Stock which a
defaulting Underwriter agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting
Underwriter of any liability it may have to the Company and the Selling
Stockholders for damages caused by its default. If other underwriters are
obligated or agree to purchase the Stock of a defaulting or withdrawing
Underwriter, either the Representatives or the Company may postpone the Delivery
Date for up to seven full business days in order to effect any changes that in
the opinion of counsel for the Company or counsel for the Underwriters may be
necessary in the Registration Statement, the Prospectus or in any other document
or arrangement.
12. TERMINATION. The obligations of the Underwriters hereunder
may be terminated by the Representatives by notice given to and received by the
Company and the Selling Stockholders prior to delivery of and payment for the
Firm Stock if, prior to that time, any of the events described in Sections 9(k)
or 9(l) shall have occurred or if the Underwriters shall decline to purchase the
Stock for any reason permitted under this Agreement.
13. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If (a) the
Company or any Selling Stockholder shall fail to tender the Stock for delivery
to the Underwriters by reason of any failure, refusal or inability on the part
of the Company or the Selling Stockholders to perform any agreement on its part
to be performed, or because any other condition of the Underwriters' obligations
hereunder required to be fulfilled by the Company is not fulfilled, the Company
and the Selling Stockholders will reimburse the Underwriters for all reasonable
out-of-pocket expenses (including fees and disbursements of counsel) incurred by
the Underwriters in connection with this Agreement and the proposed purchase of
the Stock, and upon demand the Company and the Selling Stockholders shall pay
the full amount thereof to the Representatives. If this Agreement is terminated
pursuant to Section 12 by reason of the default of one or more Underwriters,
neither the Company nor any Selling Stockholder shall be obligated to reimburse
any defaulting Underwriter on account of those expenses.
14. NOTICES, ETC. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by
mail, telex or fax to ▇▇▇▇▇▇ Brothers Inc., Three World
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
28
Attention: Syndicate Department (Fax: ▇▇▇-▇▇▇-▇▇▇▇), with a
copy, in the case of any notice pursuant to Section 10(d),
to the Director of Litigation, Office of the General
Counsel, ▇▇▇▇▇▇ Brothers Inc., ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇; and
(b) if to the Company, shall be delivered or sent by mail,
telex or fax to the address of the Company set forth in the
Registration Statement, Attention: President (Fax:
716-458-0426);
(c) if to any Selling Stockholders, shall be delivered or sent
by mail, telex or facsimile transmission to such Selling
Stockholder at the address set forth on Schedule 2 hereto.
PROVIDED, HOWEVER, that any notice to an Underwriter pursuant to Section 11(d)
shall be delivered or sent by mail, telex or fax to such Underwriter at its
address set forth in its acceptance telex to the Representatives, which address
will be supplied to any other party hereto by the Representatives upon request.
Any such statements, requests, notices or agreements shall take effect at the
time of receipt thereof. The Company and the Selling Stockholders shall be
entitled to act and rely upon any request, consent, notice or agreement given or
made on behalf of the Underwriters by ▇▇▇▇▇▇ Brothers Inc. on behalf of the
Representatives and the Company and the Underwriters shall be entitled to act
and rely upon any request, consent, notice or agreement given or made on behalf
of the Selling Stockholders by the Custodian.
15. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement
shall inure to the benefit of and be binding upon the Underwriters, the Company,
the Selling Stockholders and their respective personal representatives and
successors. This Agreement and the terms and provisions hereof are for the sole
benefit of only those persons, except that (A) the representations, warranties,
indemnities and agreements of the Company and the Selling Stockholders contained
in this Agreement shall also be deemed to be for the benefit of the person or
persons, if any, who control any Underwriter within the meaning of Section 15 of
the Securities Act and (B) the indemnity agreement of the Underwriters contained
in Section 10(c) of this Agreement shall be deemed to be for the benefit of
directors of the Company, officers of the Company who have signed the
Registration Statement and any person controlling the Company within the meaning
of Section 15 of the Securities Act. Nothing in this Agreement is intended or
shall be construed to give any person, other than the persons referred to in
this Section 15, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein.
16. SURVIVAL. The respective indemnities, representations,
warranties and agreements of the Company, the Selling Stockholders and the
Underwriters contained in this Agreement or made by or on behalf on them,
respectively, pursuant to this Agreement, shall survive the delivery of and
payment for the Stock and shall remain in full force and effect, regardless of
any investigation made by or on behalf of any of them or any person controlling
any of them.
17. DEFINITION OF THE TERMS "BUSINESS DAY" AND "SUBSIDIARY".
For purposes of this Agreement, (a) "BUSINESS DAY" means each Monday, Tuesday,
Wednesday, Thursday or Friday which is not a day on which banking institutions
in New York are generally authorized or obligated
29
by law or executive order to close and (b) "SUBSIDIARY" has the meaning set
forth in Rule 405 of the Rules and Regulations.
18. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF NEW YORK.
19. COUNTERPARTS. This Agreement may be executed in one or
more counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
20. HEADINGS. The headings herein are inserted for convenience
of reference only and are not intended to be part of, or to affect the meaning
or interpretation of, this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
30
If the foregoing correctly sets forth the agreement between
the Company, the Selling Stockholders and the Underwriters, please indicate your
acceptance in the space provided for that purpose below.
Very truly yours,
CVC, INC.
By
----------------------------
[TITLE]
CVC PRODUCTS, INC.
By:
----------------------------
[TITLE}
The Selling Stockholders named in
Schedule 2 to this
By:
----------------------------
Attorney in Fact
Accepted:
▇▇▇▇▇▇ BROTHERS INC.
PRUDENTIAL SECURITIES INCORPORATED
▇▇ ▇▇▇▇▇ SECURITIES CORPORATION
WARBURG DILLON READ LLC
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto
By ▇▇▇▇▇▇ BROTHERS INC.
By
----------------------------
AUTHORIZED REPRESENTATIVE
31
SCHEDULE I
Number of Shares of Firm
Stock To Be
UNDERWRITER PURCHASED
-------------------------------------- -----------------------------
▇▇▇▇▇▇ Brothers Inc.
Prudential Securities Incorporated
▇▇ ▇▇▇▇▇ Securities Corporation
Warburg Dillon Read LLC
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Total 3,500,000
------------
------------
32
SCHEDULE 2
Number of Shares
NAME AND ADDRESS OF SELLING STOCKHOLDER of Firm Stock
---------------------------------------- -----------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 300,000
c/o CVC, Inc.
▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 200,000
c/o CVC, Inc.
▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Total.............................................
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33