EXHIBIT 1.01
4,000,000 Shares
Digital Lightwave, Inc.
Common Stock,
$.0001 par value
UNDERWRITING AGREEMENT
__________, 1997
CREDIT SUISSE FIRST BOSTON CORPORATION
▇▇▇▇▇▇ ▇▇▇▇,
As Representatives of the Several Underwriters
Eleven Madison Avenue
New York, N.Y. 10010
Dear Sirs:
1. Introductory. Digital Lightwave, Inc., a Delaware corporation (the
"Company"), proposes to issue and sell to the several Underwriters named in
Schedule A hereto (the "Underwriters") 3,152,000 shares of its Common Stock,
$.0001 par value per share (the "Securities") and the stockholders listed in
Schedule B hereto (the "Selling Stockholders") propose severally and not jointly
to sell an aggregate of 848,000 outstanding shares of the Securities (such
4,000,000 shares of Securities being hereinafter referred to as the "Firm
Securities"). The Company also proposes to sell to the Underwriters, at the
option of the Underwriters, an aggregate of not more than 600,000 additional
shares of its Securities, as set forth below (such 600,000 additional shares
being hereinafter referred to as the "Optional Securities"). The Firm Securities
and the Optional Securities are herein collectively referred to as the "Offered
Securities." This Underwriting Agreement, as amended, supplemented or modified
from time to time is referred to herein as the "Agreement." The Company and the
Selling Stockholders, severally and not jointly, hereby agree with the
Underwriters as follows:
2. Representations and Warranties of the Company and the Selling
Stockholders. (a) The Company represents and warrants to, and agrees with, the
several Underwriters that:
(i) A registration statement on Form S-1 (No. 333-9457) relating to
the Offered Securities, including a form of prospectus, has been filed
with the Securities and Exchange Commission (the "Commission") and either
(A) has been declared effective under the Securities Act of 1933, as
amended (the "Act"), and is not proposed to be amended or (B) is proposed
to be amended by amendment or post-effective amendment. If such
registration statement (the "initial registration statement") has been
declared effective, either (A) an additional registration statement (the
"additional registration statement") relating to the Offered Securities
may have been filed with the Commission pursuant to Rule 462(b) ("Rule
462(b)") under the Act and, if so filed, has
become effective upon filing pursuant to such Rule and the Offered
Securities all have been duly registered under the Act pursuant to the
initial registration statement and, if applicable, the additional
registration statement or (B) such an additional registration statement is
proposed to be filed with the Commission pursuant to Rule 462(b) and will
become effective upon filing pursuant to such Rule and upon such filing
the Offered Securities will all have been duly registered under the Act
pursuant to the initial registration statement and such additional
registration statement. If the Company does not propose to amend the
initial registration statement or if an additional registration statement
has been filed and the Company does not propose to amend it, and if any
post-effective amendment to either such registration statement has been
filed with the Commission prior to the execution and delivery of this
Agreement, the most recent amendment (if any) to each such registration
statement has been declared effective by the Commission or has become
effective upon filing pursuant to Rule 462(c) ("Rule 462(c)") under the
Act or, in the case of the additional registration statement, Rule 462(b).
For purposes of this Agreement, "Effective Time" with respect to the
initial registration statement or, if filed prior to the execution and
delivery of this Agreement, the additional registration statement means
(A) if the Company has advised the Representatives that it does not
propose to amend such registration statement, the date and time as of
which such registration statement, or the most recent post-effective
amendment thereto (if any) filed prior to the execution and delivery of
this Agreement, was declared effective by the Commission or has become
effective upon filing pursuant to Rule 462(c), or (B) if the Company has
advised the Representatives that it proposes to file an amendment or
post-effective amendment to such registration statement, the date and time
as of which such registration statement, as amended by such amendment or
post-effective amendment, as the case may be, is declared effective by the
Commission. If an additional registration statement has not been filed
prior to the execution and delivery of this Agreement but the Company has
advised the Representatives that it proposes to file one, "Effective Time"
with respect to such additional registration statement means the date and
time as of which such registration statement is filed and becomes
effective pursuant to Rule 462(b). "Effective Date" with respect to the
initial registration statement or the additional registration statement
(if any) means the date of the Effective Time thereof. The initial
registration statement, as amended at its Effective Time, including all
information contained in the additional registration statement (if any)
and deemed to be a part of the initial registration statement as of the
Effective Time of the additional registration statement pursuant to the
General Instructions of the Form on which it is filed and including all
information (if any) deemed to be a part of the initial registration
statement as of its Effective Time pursuant to Rule 430A(b) ("Rule
430A(b)") under the Act, is hereinafter referred to as the "Initial
Registration Statement". The additional registration statement, as amended
at its Effective Time, including the contents of the initial registration
statement incorporated by reference therein and including all information
(if any) deemed to be a part of the additional registration statement as
of its Effective Time pursuant to Rule 430A(b), is hereinafter referred to
as the "Additional Registration Statement". The Initial Registration
Statement and the Additional Registration Statement are hereinafter
referred to collectively as the "Registration Statements" and individually
as a "Registration Statement". The form of prospectus relating to the
Offered Securities, as first filed with the Commission pursuant to and in
accordance with Rule 424(b) ("Rule 424(b)") under the Act or (if no such
filing is required) as included in a Registration Statement, is
hereinafter referred to as the "Prospectus". No document has been or will
be prepared or distributed in reliance on Rule 434 under the Act.
(ii) If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement: (A) on the
Effective Date of the Initial Registration Statement, the Initial
Registration Statement conformed in all material respects to the
requirements of the Act and the rules and regulations of the Commission
("Rules and Regulations") and did not include any
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untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading, (B) on the Effective Date of the Additional Registration
Statement (if any), each Registration Statement conformed, or will
conform, in all material respects to the requirements of the Act and the
Rules and Regulations and did not include, or will not include, any untrue
statement of a material fact and did not omit, or will not omit, to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading, and (C) on the date of this Agreement,
the Initial Registration Statement and, if the Effective Time of the
Additional Registration Statement is prior to the execution and delivery
of this Agreement, the Additional Registration Statement each conforms,
and at the time of filing of the Prospectus pursuant to Rule 424(b) or (if
no such filing is required) at the Effective Date of the Additional
Registration Statement in which the Prospectus is included, each
Registration Statement and the Prospectus will conform, in all material
respects to the requirements of the Act and the Rules and Regulations, and
none of such documents includes, or will include, any untrue statement of
a material fact or omits, or will omit, to state any material fact
required to be stated therein or necessary to make the statements therein
(and, in the case of the Prospectus, in light of the circumstances under
which they were made) not misleading. If the Effective Time of the Initial
Registration Statement is subsequent to the execution and delivery of this
Agreement: on the Effective Date of the Initial Registration Statement,
the Initial Registration Statement and the Prospectus will conform in all
material respects to the requirements of the Act and the Rules and
Regulations, neither of such documents will include any untrue statement
of a material fact or will omit to state any material fact required to be
stated therein or necessary to make the statements therein (and, in the
case of the Prospectus, in light of the circumstances under which such
statements were made) not misleading, and no Additional Registration
Statement has been or will be filed. The two preceding sentences do not
apply to statements in or omissions from a Registration Statement or the
Prospectus (or any supplements thereto) based upon written information
furnished to the Company by any Underwriter through the Representatives
specifically for use therein, it being understood and agreed that the only
such information is that described as such in Section 7(c).
(iii) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware, with
power and authority (corporate and other) to own its properties and
conduct its business as described in the Prospectus; and the Company is
duly qualified to do business as a foreign corporation in good standing in
all other jurisdictions in which its ownership or lease of property or the
conduct of its business requires such qualification, except where the
failure, individually or in the aggregate, to be so qualified would not
have a material adverse effect upon the condition, financial or otherwise,
results of operations, business affairs or business prospects of the
Company.
(iv) The Company has no subsidiaries and owns no securities,
directly or indirectly, of any entity.
(v) The Company's authorized capitalization is as described in the
Prospectus; all outstanding shares of capital stock of the Company have
been duly authorized and are validly issued, fully paid and nonassessable
and conform to the description thereof contained in the Prospectus; the
Offered Securities have been duly authorized and, when issued and
delivered against payment therefor as provided herein, will be validly
issued, fully paid and nonassessable and conform to the description
thereof contained in the Prospectus; the stockholders of the Company have
no preemptive rights with respect to the Securities; except as described
in the Prospectus, there are no other rights to subscribe for or purchase
any shares of capital stock issued
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by the Company; and, except as described in the Prospectus, there are no
outstanding securities or obligations of the Company convertible into,
exercisable for or exchangeable for any capital stock of the Company.
(vi) Except as disclosed in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person that would
give rise to a valid claim against the Company or any Underwriter for a
brokerage commission, finder's fee or other like payment in connection
with the transactions contemplated hereby.
(vii) No person or entity has any right, not effectively satisfied
or waived, to require the Company to include any securities with the
Securities registered pursuant to a Registration Statement; no person or
entity has any right to require the Company to file a registration
statement under the Act with respect to any securities of the Company
owned or to be owned by such person; and, except as described in the
Prospectus, no person or entity has any right to require the Company to
include such securities with securities to be registered pursuant to any
other registration statement filed by the Company under the Act.
(viii) The Offered Securities have been approved for listing on the
Nasdaq Stock Market's National Market, subject to notice of issuance.
(ix) No consent, approval, authorization, or order of, or filing
with, any governmental agency or body or any court is required to be
obtained or made by the Company for the consummation of the transactions
contemplated by this Agreement in connection with the sale of the Offered
Securities by the Company, except such as have been obtained and made for
registration of the Offered Securities under the Act and such as may be
required by the National Association of Securities Dealers, Inc. or under
state or foreign securities laws.
(x) The execution, delivery and performance of this Agreement and
the sale of the Offered Securities by the Company will not result in a
breach or violation of any of the terms and provisions of the charter or
bylaws of the Company. The execution, delivery and performance of this
Agreement and the sale of the Offered Securities by the Company will not
result in a breach or violation of any of the terms and provisions of, or
constitute a default under, any statute, any rule, regulation or order of
any governmental agency or body or any court having jurisdiction over the
Company or any of its properties, or any agreement or instrument to which
the Company is a party or by which the Company is bound or to which any of
the properties of the Company is subject, which breach violation or
default would, individually or in the aggregate have a material adverse
effect on the Company.
(xi) This Agreement has been duly authorized, executed and delivered
by the Company.
(xii) Except as disclosed in the Prospectus, the Company has good
and marketable title to all real properties and all other properties and
assets owned by it, in each case free from liens, encumbrances and defects
that would materially affect the value thereof or materially interfere
with the use made or to be made thereof; and except as disclosed in the
Prospectus, the Company holds any leased real or personal property under
valid and enforceable leases with no exceptions that would materially
interfere with the use made or to be made thereof.
(xiii) The Company possesses adequate certificates, authorities or
permits issued by appropriate governmental agencies or bodies necessary to
conduct the business now operated by it
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as described in the Prospectus, except for certificates, authorities or
permits that are not material and do not interfere with the conduct of the
business of the Company; and the Company has not received any notice of
proceedings relating to the revocation or modification of any such
certificate, authority or permit that, if determined adversely to the
Company, would individually or in the aggregate have a material adverse
effect on the Company.
(xiv) No labor dispute with the employees of the Company exists or,
to the knowledge of the Company, is imminent that might have a material
adverse effect on the Company; the Company is not engaged in any unfair
labor practice; and no unfair labor practice complaint is pending or, to
its best knowledge, threatened against the Company.
(xv) Except as disclosed in the Prospectus, the Company owns
trademarks, trade names and other rights to inventions, know-how, patents,
patent applications, copyrights, confidential information and other
intellectual property (collectively, "intellectual property rights")
necessary to operate its business as now conducted by it and as proposed
to be conducted, each as described in the Prospectus; to the best
knowledge of the Company, the Company has not infringed, and is not
infringing, and the Company has not received any notice of claimed
infringement with respect to, any intellectual property rights of others;
and to the best knowledge of the Company there is no infringement by
others of the intellectual property rights of the Company.
(xvi) Except as disclosed in the Prospectus, there are no pending
actions, suits or proceedings against or affecting the Company or any of
its properties that, if determined adversely to the Company, would
individually or in the aggregate have a material adverse effect on the
condition (financial or otherwise), business, properties or results of
operations of the Company, or would materially and adversely affect the
ability of the Company to perform its obligations under this Agreement, or
which are otherwise material in the context of the sale of the Offered
Securities; and no such actions, suits or proceedings are, to the
Company's knowledge, threatened or contemplated.
(xvii) The financial statements included in each Registration
Statement and the Prospectus present fairly the financial position of the
Company as of the dates shown and its results of operations and cash flows
for the periods shown, and such financial statements have been prepared in
conformity with the generally accepted accounting principles in the United
States applied on a consistent basis.
(xviii) Except as disclosed in the Prospectus, since the date of the
latest audited financial statements included in the Prospectus there has
been no material adverse change, nor any development or event that may
result in a prospective material adverse change, in the condition
(financial or otherwise), business, properties or results of operations of
the Company; there have been no transactions entered into by the Company,
other than in the ordinary course of business, which are material with
respect to the Company; and, except as disclosed in or contemplated by the
Prospectus, there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital stock.
(xix) There is no document or contract of a character required to be
described in the Registration Statement or the Prospectus, or to be filed
as an exhibit to the Registration Statement, that is not described or
filed as required.
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(xx) The Company is not and, after giving effect to the offering and
sale of the Offered Securities and the application of the proceeds thereof
as described in the Prospectus, will not be an "investment company" as
defined in the Investment Company Act of 1940.
(xxi) Neither the Company nor any of its affiliates does business
with the government of Cuba or with any person or affiliate located in
Cuba within the meaning of Section 517.075, Florida Statutes, and the
Company agrees to comply with such Section if prior to the completion of
the distribution of the Offered Securities it commences doing such
business.
(b) Each Selling Stockholder severally and not jointly represents
and warrants to, and agrees with, the several Underwriters that:
(i) Such Selling Stockholder has, and on the First Closing Date
(defined below) will have, full right, power and authority to enter into
this Agreement and to sell, assign, transfer and deliver the Offered
Securities to be delivered by such Selling Stockholder on such Closing
Date hereunder; and upon the delivery of and payment for such Offered
Securities on such Closing Date, the several Underwriters will acquire
valid and unencumbered title to the Offered Securities to be delivered by
such Selling Stockholder on such Closing Date. Such Selling Stockholder
(other than ▇▇▇▇▇▇▇▇▇ Capital Corp., Norton ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇)
has, and on the First Closing Date (defined below) will have, valid and
unencumbered title to the Offered Securities to be delivered by such
Selling Stockholder on such Closing Date.
(ii) If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement: (A) on the
Effective Date of the Initial Registration Statement, the Initial
Registration Statement did not include any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, (B) on the
Effective Date of the Additional Registration Statement (if any), each
Registration Statement did not include, or will not include, any untrue
statement of a material fact and did not omit, or will not omit, to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading, and (C) on the date of this Agreement,
the Initial Registration Statement and, if the Effective Time of the
Additional Registration Statement is prior to the execution and delivery
of this Agreement, the Additional Registration Statement does not include,
or will not include, any untrue statement of a material fact or omit, or
will omit, to state any material fact required to be stated therein or
necessary to make the statements therein (and, in case of the Prospectus,
in light of the circumstances under which they were made) not misleading.
If the Effective Time of the Initial Registration Statement is subsequent
to the execution and delivery of this Agreement: on the Effective Date of
the Initial Registration Statement, the Initial Registration Statement and
the Prospectus will not include any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary
to make the statements therein (and, in the case of the Prospectus, in
light of the circumstances under which they were made) not misleading. The
two preceding sentences do not apply to statements in or omissions from a
Registration Statement or the Prospectus (or any supplements thereto)
based upon written information furnished to the Company by any Underwriter
through the Representatives specifically for use therein, it being
understood and agreed that the only such information is that described as
such in Section 7(c). The representations and warranties set forth in this
subparagraph 2(b)(ii) shall apply only to statements and/or omissions from
any Registration Statement or any Prospectus made in reliance upon and in
conformity with the most recent information relating to such Selling
Stockholder in writing expressly for use therein.
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(iii) No consent, approval, authorization or order of, or filing
with, any governmental agency or body or any court is required to be
obtained or made by such Selling Stockholder for the consummation of the
transactions contemplated by the Custody Agreement or this Agreement in
connection with the sale of the Offered Securities sold by such Selling
Stockholder, except such as have been obtained and made for registration
of the Offered Securities under the Act and such as may be required by the
National Association of Securities Dealers, Inc., or under any foreign or
state securities laws.
(iv) The execution, delivery and performance of the Custody
Agreement and this Agreement and the consummation of the transactions
therein and herein contemplated will not result in a breach or violation
of any of the terms and provisions of, or constitute a default under, any
statute, any rule, regulation or order of any governmental agency or body
or any court having jurisdiction over such Selling Stockholder or any
their properties or any agreement or instrument to which such Selling
Stockholder is a party or by which such Selling Stockholder is bound or to
which any of the properties of such Selling Stockholder is subject.
(v) Each of this Agreement, the Power of Attorney and related
Custody Agreement with respect to each Selling Stockholder has been duly
authorized, executed and delivered by such Selling Stockholder and
constitutes a valid and legally binding obligation of each such Selling
Stockholder enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or affecting
creditors' rights, to general equity principles and to applicable laws and
public policy considerations which may limit rights to indemnity or
contribution thereunder.
3. Purchase, Sale and Delivery of Offered Securities. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company and each Selling Stockholder
agree, severally and not jointly, to sell to each Underwriter, and each
Underwriter agrees, severally and not jointly, to purchase from the Company and
each Selling Stockholder, at a purchase price of $ per share, the respective
number of shares of Firm Securities (rounded up or down, as determined by Credit
Suisse First Boston Corporation ("CSFBC") in its discretion, in order to avoid
fractions) obtained by multiplying 3,152,000 Firm Securities in the case of the
Company and the number of Firm Securities set forth opposite the name of such
Selling Stockholder in Schedule B hereto, in the case of a Selling Stockholder,
in each case, by a fraction the numerator of which is the number of Firm
Securities set forth opposite the name of such Underwriter in Schedule A hereto
and the denominator of which is the total number of Firm Securities.
Certificates in negotiable form for the Offered Securities to be sold by
the Selling Stockholders hereunder have been placed in custody, for delivery
under this Agreement, under Custody Agreements made with American Stock Transfer
and Trust Company, as custodian ("Custodian"). Each Selling Stockholder agrees
that the shares represented by the certificates held in custody for such Selling
Stockholder under such Custody Agreements are subject to the interests of the
Underwriters hereunder, that the arrangements made by such Selling Stockholder
for such custody are to that extent irrevocable, and that the obligations of the
Selling Stockholders hereunder shall not be terminated by operation of law,
whether by the death of any individual Selling Stockholder or the occurrence of
any other event, or in the case of a trust, by the death of any trustee or
trustees or the termination of such trust. If any individual Selling Stockholder
or any such trustee or trustees should die, or if any other such event should
occur, or if any of such trusts should terminate, before the delivery of the
Offered Securities hereunder, certificates for such Offered Securities shall be
delivered by the Custodian in accordance with the terms and conditions of this
Agreement as if such death or other event or termination had not
7
occurred, regardless of whether or not the Custodian shall have received notice
of such death or other event or termination.
The Company and the Custodian will deliver the Firm Securities to the
Representatives for the accounts of the Underwriters, against payment of the
purchase price at a bank acceptable to CSFBC in federal reserve funds
immediately available by wire transfer to the account of the Company payable to
the Company in the case of 3,152,000 shares of Firm Securities, and in federal
reserve funds immediately available by wire transfer to the account of the
Custodian payable to the Custodian in the case of 848,000 shares of Firm
Securities, at the office of King & Spalding, Atlanta, Georgia, at 10:00 A.M.,
New York time, on , or at such other time not later than seven full business
days thereafter as CSFBC and the Company determine, such time being herein
referred to as the "First Closing Date." The certificates for the Firm
Securities so to be delivered, will be in definitive form, in such denominations
and registered in such names as CSFBC requests upon reasonable notice and will
be made available for checking and packaging at the above office of King &
Spalding at least 24 hours prior to the First Closing Date.
In addition, upon written notice from CSFBC given to the Company from time
to time not more than 30 days subsequent to the date of the Prospectus, the
Underwriters may purchase all or less than all of the Optional Securities at the
purchase price per Security to be paid for the Firm Securities. The Company
agrees to sell to the Underwriters the number of shares of Optional Securities
specified in such notice and the Underwriters agree, severally and not jointly,
to purchase such Optional Securities. Such Optional Securities shall be
purchased for the account of each Underwriter in the same proportion as the
number of shares of Firm Securities set forth opposite such Underwriter's name
bears to the total number of shares of Firm Securities (subject to adjustment by
CSFBC to eliminate fractions) and may be purchased by the Underwriters only for
the purpose of covering over-allotments made in connection with the sale of the
Firm Securities. No Optional Securities shall be sold or delivered unless the
Firm Securities previously have been, or simultaneously are, sold and delivered.
The right to purchase the Optional Securities or any portion thereof may be
exercised from time to time and to the extent not previously exercised may be
surrendered and terminated at any time upon notice by CSFBC to the Company.
Each time for the delivery of and payment for the Optional Securities,
being herein referred to as an "Optional Closing Date", which may be the First
Closing Date (the First Closing Date and each Optional Closing Date, if any,
being sometimes referred to as a "Closing Date"), shall be determined by CSFBC
but shall be not later than five full business days after written notice of
election to purchase Optional Securities is given. The Company will deliver the
Optional Securities being purchased on each Optional Closing Date to the
Representatives for the accounts of the several Underwriters, against payment of
the purchase price therefor in federal reserve funds immediately available by
wire transfer to the account of the Company at a bank acceptable to CSFBC,
payable to the Company. The certificates for the Optional Securities being
purchased on each Optional Closing Date, will be in definitive form, in such
denominations and registered in such names as CSFBC requests upon reasonable
notice prior to such Optional Closing Date and will be made available for
checking and packaging at the above office of King & Spalding at a reasonable
time in advance of such Optional Closing Date.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Offered Securities for sale to the public as
set forth in the Prospectus.
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5. Certain Agreements of the Company and the Selling Stockholders.
The Company agrees with the several Underwriters that:
(a) If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement, the Company will
file the Prospectus with the Commission pursuant to and in accordance with
subparagraph (1) (or, if applicable and if consented to by CSFBC,
subparagraph (4)) of Rule 424(b) not later than the earlier of (A) the
second business day following the execution and delivery of this Agreement
or (B) the fifteenth business day after the Effective Date of the Initial
Registration Statement. The Company will advise CSFBC promptly of any such
filing pursuant to Rule 424(b). If the Effective Time of the Initial
Registration Statement is prior to the execution and delivery of this
Agreement and an additional registration statement is necessary to
register a portion of the Offered Securities under the Act but the
Effective Time thereof has not occurred as of such execution and delivery,
the Company will file the additional registration statement or, if filed,
will file a post-effective amendment thereto with the Commission pursuant
to and in accordance with Rule 462(b) on or prior to 10:00 P.M., New York
time, on the date of this Agreement or, if earlier, on or prior to the
time the Prospectus is printed and distributed to any Underwriter, or will
make such filing at such later date as shall have been consented to by
CSFBC.
(b) The Company will advise CSFBC promptly of any proposal to amend
or supplement the initial or any additional registration statement as
filed or the related prospectus or the Initial Registration Statement, the
Additional Registration Statement (if any) or the Prospectus and will not
effect such amendment or supplementation without CSFBC's consent, which
shall not be unreasonably withheld; and the Company will also advise CSFBC
promptly of the effectiveness of each Registration Statement (if its
Effective Time is subsequent to the execution and delivery of this
Agreement) and of any amendment or supplementation of a Registration
Statement or the Prospectus and of the institution by the Commission of
any stop order proceedings in respect of a Registration Statement and will
use its best efforts to prevent the issuance of any such stop order and to
obtain as soon as possible its lifting, if issued.
(c) If, at any time when a prospectus relating to the Offered
Securities is required to be delivered under the Act in connection with
sales by any Underwriter or dealer, any event occurs 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
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if it is necessary at any time to
amend or supplement the Prospectus to comply with the Act, the Company
will promptly notify CSFBC of such event and will promptly prepare and
file with the Commission, at its own expense, an amendment or supplement
which will correct such statement or omission or an amendment which will
effect such compliance. Neither CSFBC's consent to, nor the Underwriters'
delivery of, any such amendment or supplement shall constitute a waiver of
any of the conditions set forth in Section 6.
(d) As soon as practicable, but not later than the Availability Date
(as defined below), the Company will make generally available to its
securityholders an earnings statement covering a period of at least 12
months beginning after the Effective Date of the Initial Registration
Statement (or, if later, the Effective Date of the Additional Registration
Statement) which will satisfy the provisions of Section 11(a) of the Act.
For the purpose of the
9
preceding sentence, "Availability Date" means the 45th day after the end
of the fourth fiscal quarter following the fiscal quarter that includes
such Effective Date, except that, if such fourth fiscal quarter is the
last quarter of the Company's fiscal year, "Availability Date" means the
90th day after the end of such fourth fiscal quarter.
(e) The Company will furnish to the Representatives copies of each
Registration Statement (three of which will be signed and will include all
exhibits), each related preliminary prospectus, and, so long as a
prospectus relating to the Offered Securities is required to be delivered
under the Act in connection with sales by any Underwriter or dealer, the
Prospectus and all amendments and supplements to such documents, in each
case in such quantities as CSFBC requests. The Prospectus shall be so
furnished on or prior to 3:00 P.M., New York time, on the business day
following the later of the execution and delivery of this Agreement or the
Effective Time of the Initial Registration Statement. All other documents
shall be so furnished as soon as available. The Company will pay the
expenses of printing and distributing to the Underwriters all such
documents.
(f) The Company will arrange for the qualification of the Offered
Securities for sale under the laws of such jurisdictions as CSFBC
designates and will continue such qualifications in effect so long as
required to complete the distribution of the Offered Securities, provided
that the Company shall not be required to qualify as a foreign corporation
or to consent to service of process under the laws of any such
jurisdiction (except service of process with respect to the offering and
sale of the Offered Securities).
(g) During the period of five years hereafter, the Company will
furnish to the Representatives and, upon request, to each of the other
Underwriters, as soon as practicable after the end of each fiscal year, a
copy of its annual report to stockholders for such year; and the Company
will furnish to the Representatives (i) as soon as available, a copy of
each report or definitive proxy statement of the Company filed with the
Commission under the Securities Exchange Act of 1934, as amended, or
mailed to stockholders, and (ii) from time to time, such other information
of a public nature concerning the Company as CSFBC may reasonably request.
(h) For a period of 180 days after the date of the Prospectus, the
Company will not offer, sell, contract to sell, pledge or otherwise
dispose of, directly or indirectly, or file with the Commission a
registration statement under the Act relating to, any additional shares of
its Securities or securities convertible into or exchangeable or
exercisable for any shares of its Securities, or publicly disclose the
intention to make any such offer, sale, pledge, disposition or filing,
without the prior written consent of CSFBC, except issuances of Securities
pursuant to the conversion or exchange of convertible or exchangeable
securities or the exercise of warrants or options, in each case
outstanding on the date hereof, grants of employee stock options pursuant
to the terms of a plan in effect on the date hereof and issuances of
Securities pursuant to the exercise of such options.
The Company and each Selling Stockholder, severally and not jointly, agree
with the several Underwriters that the Company will pay all expenses incident to
the performance of the obligations of the Company and such Selling Stockholder,
as the case may be (except for the underwriting discounts and commissions
payable with respect to the Selling Stockholders' shares sold in the Offering,
which each Selling Stockholder will bear in proportion to amounts sold), under
this Agreement, and will reimburse the Underwriters (if and to the extent
incurred by them) for any filing fees and other
10
expenses (including fees and disbursements of counsel) incurred by them in
connection with qualification of the Offered Securities for sale under the laws
of such jurisdictions as CSFBC designates and the printing of memoranda relating
thereto, for the filing fee of the National Association of Securities Dealers,
Inc. relating to the Offered Securities, for any travel expenses of the
Company's officers and employees and any other expenses of the Company in
connection with attending or hosting meetings with prospective purchasers of the
Offered Securities, for any transfer taxes on the sale by the Selling
Stockholders of the Offered Securities to the Underwriters and for expenses
incurred in distributing preliminary prospectuses and the Prospectus (including
any amendments and supplements thereto) to the Underwriters.
Each Selling Stockholder agrees, severally and not jointly, to deliver to
CSFBC, attention: Transactions Advisory Group, on or prior to the First Closing
Date a properly completed and executed United States Treasury Department Form
W-9 (or other applicable form or statement specified by Treasury Department
regulations in lieu thereof).
Each Selling Stockholder agrees, severally and not jointly, for a period
of 180 days after the date of the Prospectus, not to offer, sell, contract to
sell, pledge or otherwise dispose of, directly or indirectly, any additional
shares of the Securities of the Company or securities convertible into or
exchangeable or exercisable for any shares of Securities, or publicly disclose
the intention to make any such offer, sale, pledge or disposition, without the
prior written consent of CSFBC.
6. Conditions of the Obligations of the Underwriters. The obligations of
the several Underwriters to purchase and pay for the Firm Securities on the
First Closing Date and the Optional Securities to be purchased on each Optional
Closing Date will be subject to the accuracy of the representations and
warranties on the part of the Company and the Selling Stockholders herein, to
the accuracy of the statements of Company officers made pursuant to the
provisions hereof, to the performance by the Company and the Selling
Stockholders of their obligations hereunder and to the following additional
conditions precedent:
(a) The Representatives shall have received a letter, dated the date
of delivery thereof (which, if the Effective Time of the Initial
Registration Statement is prior to the execution and delivery of this
Agreement, shall be on or prior to the date of this Agreement or, if the
Effective Time of the Initial Registration Statement is subsequent to the
execution and delivery of this Agreement, shall be prior to the filing of
the amendment or post-effective amendment to the registration statement to
be filed shortly prior to such Effective Time), of Coopers & ▇▇▇▇▇▇▇
L.L.P., confirming that they are independent public accountants within the
meaning of the Act and the applicable published Rules and Regulations
thereunder and stating to the effect that:
(i) in their opinion the financial statements
examined by them and included in the Registration Statements comply
as to form in all material respects with the applicable accounting
requirements of the Act and the related published Rules and
Regulations;
(ii) on the basis of a reading of the latest
available interim financial statements of the Company, inquiries of
officials of the Company who have responsibility for financial and
accounting matters and other specified procedures, nothing came to
their attention that caused them to believe that:
11
(A) at the date of the latest available balance
sheet read by such accountants, or at a subsequent specified
date not more than five days prior to the date of this
Agreement, there was any change in the capital stock or any
increase in short-term indebtedness or long-term debt of the
Company or, at the date of the latest available balance sheet
read by such accountants, there was any decrease in net
current assets or net assets, as compared with amounts shown
on the latest balance sheet included in the Prospectus; or
(B) for the period from the closing date of the
latest income statement included in the Prospectus to the
closing date of the latest available income statement read by
such accountants there were any decreases, as compared with
the corresponding period of the previous year, and with the
period of corresponding length ended the date of the latest
income statement included in the Prospectus, in net sales or
net operating income or in the total or per share amounts of
income before extraordinary items or net income;
except in all cases set forth in clauses (A) and (B) above for
changes, increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter; and
(iii) they have compared specified dollar amounts
(or percentages derived from such dollar amounts) and other
financial information contained in the Registration Statements (in
each case to the extent that such dollar amounts, percentages and
other financial information are derived from the general accounting
records of the Company subject to the internal controls of the
Company's accounting system or are derived directly from such
records by analysis or computation) with the results obtained from
inquiries, a reading of such general accounting records and other
procedures specified in such letter and have found such dollar
amounts, percentages and other financial information to be in
agreement with such results, except as otherwise specified in such
letter.
For purposes of this subsection, (i) if the Effective Time of the
Initial Registration Statements is subsequent to the execution and
delivery of this Agreement, "Registration Statements" shall mean the
initial registration statement as proposed to be amended by the amendment
or post-effective amendment to be filed shortly prior to its Effective
Time, (ii) if the Effective Time of the Initial Registration Statements is
prior to the execution and delivery of this Agreement but the Effective
Time of the Additional Registration Statement is subsequent to such
execution and delivery, "Registration Statements" shall mean the Initial
Registration Statement and the additional registration statement as
proposed to be filed or as proposed to be amended by the post-effective
amendment to be filed shortly prior to its Effective Time, and (iii)
"Prospectus" shall mean the prospectus included in the Registration
Statements.
(b) If the Effective Time of the Initial Registration Statement is
not prior to the execution and delivery of this Agreement, such Effective
Time shall have occurred not later than 10:00 P.M., New York time, on the
date of this Agreement or such later date as shall have been consented to
by CSFBC. If the Effective Time of the Additional Registration Statement
(if any) is not prior to the execution and delivery of this Agreement,
such Effective Time shall have occurred not later than 10:00 P.M., New
York time, on the date of this Agreement or, if earlier, the time the
Prospectus is printed and distributed to any Underwriter,
12
or shall have occurred at such later date as shall have been consented to
by CSFBC. If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement, the Prospectus
shall have been filed with the Commission in accordance with the Rules and
Regulations and Section 5(a) of this Agreement. Prior to such Closing
Date, no stop order suspending the effectiveness of a Registration
Statement shall have been issued and no proceedings for that purpose shall
have been instituted or, to the knowledge of the Company, any Selling
Stockholder or the Representatives, shall be contemplated by the
Commission.
(c) Subsequent to the execution and delivery of this Agreement,
there shall not have occurred (i) any change, or any development or event
involving a prospective change, in the condition (financial or otherwise),
business, properties or results of operations of the Company which, in the
judgment of a majority in interest of the Underwriters including the
Representatives, is material and adverse and makes it impractical or
inadvisable to proceed with completion of the public offering or the sale
of and payment for the Offered Securities; (ii) any downgrading in the
rating of any debt securities of the Company by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule 436(g)
under the Act), or any public announcement that any such organization has
under surveillance or review its rating of any debt securities of the
Company (other than an announcement with positive implications of a
possible upgrading, and no implication of a possible downgrading, of such
rating); (iii) any suspension or limitation of trading in securities
generally on the New York Stock Exchange or any setting of minimum prices
for trading on such exchange, or any suspension of trading of any
securities of the Company on any exchange or in the over-the-counter
market; (iv) any banking moratorium declared by U.S. Federal or New York
authorities; or (v) any outbreak or escalation of major hostilities in
which the United States is involved, any declaration of war by Congress or
any other substantial national or international calamity or emergency if,
in the judgment of a majority in interest of the Underwriters including
the Representatives, the effect of any such outbreak, escalation,
declaration, calamity or emergency makes it impractical or inadvisable to
proceed with completion of the public offering or the sale of and payment
for the Offered Securities.
(d) The Representatives shall have received an opinion, dated such
Closing Date, of ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Company, to the effect
that:
(i) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of
Delaware, with corporate power and authority to own its properties
and conduct its business as described in the Prospectus; and the
Company is duly qualified to do business as a foreign corporation in
good standing in each jurisdiction in which it is known to such
counsel to own or lease property or conduct business and in which
the failure, individually or in the aggregate, to be so qualified
would have a material adverse effect on the Company.
(ii) The Offered Securities delivered on such Closing Date and
all other outstanding shares of the Securities of the Company have
been duly authorized and validly issued, are fully paid and
nonassessable and conform to the description thereof contained in
the Prospectus; the stockholders of the Company have no preemptive
rights with respect to the Offered Securities; and, to the best
knowledge of such counsel, there are no other rights to subscribe
for or purchase any shares of capital stock issued by the Company
and (except as described in the Prospectus) no
13
outstanding securities or obligations of the Company convertible
into, exercisable for or exchangable for any capital stock of the
Company.
(iii) To the best knowledge of such counsel, no person or
entity has any right, not effectively satisfied or waived, to
require the Company to include any securities with the Securities
registered pursuant to a Registration Statement; no person or entity
has any right to require the Company to file a registration
statement under the Act with respect to any securities of the
Company owned or to be owned by such person; and, except as
described in the Prospectus, no person or entity has any right to
require the Company to include such securities with securities to be
registered pursuant to any other registration statement filed by the
Company under the Act.
(iv) No consent, approval, authorization, or order of, or
filing with, any governmental agency or body or, to such counsel's
knowledge, any court is required to be obtained or made by the
Company in connection with the sale of the Offered Securities by the
Company other than registration of the Offered Securities Under the
Act (except such counsel will not express an opinion as to any
necessary qualification under the state securities or blue sky laws
of the various jurisdictions in which the Offered Securities are
being offered by the Underwriters or the review of the terms of the
public offering of the Offered Securities by the NASD).
(v) The execution, delivery and performance of this Agreement
and the consummation of the transactions herein contemplated will
not result in a breach or violation of any of the terms and
provisions of the charter or bylaws of the Company. The execution,
delivery and performance of this Agreement and the consummation of
the transactions herein contemplated will not result in a breach or
violation of any of the terms and provisions of, or constitute a
default under, any statute, any rule, regulation or order of any
governmental agency or body or any court having jurisdiction over
the Company or any of its properties, or any agreement or instrument
to which the Company is a party or by which the Company is bound or
to which any of the properties of the Company is subject, of which
such counsel is aware, which, breach, default or violation would
have a material adverse effect on the Company.
(vi) To the best knowledge of such counsel, there are no
pending actions, suits or proceedings against or affecting the
Company or any of its properties that, if determined adversely to
the Company, would individually or in the aggregate have a material
adverse effect on the condition (financial or otherwise), business,
properties or results of operations of the Company, or would
materially and adversely affect the ability of the Company to
perform its obligations under this Agreement, or which are otherwise
material in the context of the sale of the Offered Securities; and
no such actions, suits or proceedings are threatened or, to the
Company's knowledge, contemplated.
(vii) This Agreement has been duly authorized, executed and
delivered by the Company.
(viii) The Initial Registration Statement was declared
effective under the Act as of the date specified in such opinion,
the Additional Registration Statement (if any) was filed and became
effective under the Act as of the date specified in such opinion,
14
the Prospectus either was filed with the Commission pursuant to
subparagraph (1) or (4) of Rule 424(b) on the date specified therein
or was included in the Initial Registration Statement or the
Additional Registration Statement (as the case may be), and, to the
best knowledge of such counsel, no stop order suspending the
effectiveness of a Registration Statement or any part thereof has
been issued and no proceedings for that purpose have been instituted
or are pending or contemplated under the Act, and each Registration
Statement and the Prospectus, and each amendment or supplement
thereto, as of their respective effective or issue dates, complied
as to form in all material respects with the requirements of the Act
and the Rules and Regulations.
(ix) The statements in the Registration Statement and the
Prospectus under the captions "Business -- Regulation," "Description
of Capital Stock" and "Shares Eligible For Future Sale," insofar as
they are descriptions of laws, regulations and rules, of legal and
governmental proceedings or of contracts, agreements, leases and
other legal documents known to such counsel, or refer to statements
of law or legal conclusions, are complete and accurate in all
material respects.
In addition, such counsel shall state that it has participated
in conferences with officers and other representatives of the
Company, representatives of the independent public accountants for
the Company and the Representatives and counsel to the Underwriters
at which the contents of the Registration Statement and Prospectus
and related matters were discussed and, although such counsel has
not undertaken to investigate or verify independently and does not
assume any responsibility for, the accuracy, completeness or
fairness of the statements contained in the Registration Statement
and Prospectus (except as otherwise expressly set forth herein), on
the basis of the foregoing, no facts have come to such counsel's
attention that caused such counsel to believe that any part of the
Registration Statement (other than the financial statements and
notes thereto and other financial, statistical and accounting data
or schedules included therein, or omitted therefrom, as to which
such counsel need express no opinion), as amended or supplemented,
at the time such part of the Registration Statement became
effective, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or the
Prospectus (other than the financial statements and notes thereto
and other financial, statistical and accounting data or schedules
included therein, or omitted therefrom, as to which such counsel
expresses no opinion), as amended or supplemented, on the date of
filing thereof with the Commission and on the date hereof, contained
an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not
misleading.
(e) The Representatives shall have received the opinion contemplated
in the Power of Attorney executed and delivered by each Selling
Stockholder and an opinion, dated such Closing Date, of Holland & Knight,
counsel for the Selling Stockholders, to the effect that:
(i) Each Selling Stockholder had valid and unencumbered title
to the Offered Securities delivered by such Selling Stockholder on
such Closing Date and had full right, power and authority to sell,
assign, transfer and deliver the Offered Securities
15
delivered by such Selling Stockholder on such Closing Date
hereunder; and the several Underwriters have acquired valid and
unencumbered title to the Offered Securities purchased by them from
the Selling Stockholders on such Closing Date hereunder;
(ii) No consent, approval, authorization or order of, or
filing with, any governmental agency or body or, to such counsel's
knowledge, any court is required to be obtained or made by any
Selling Stockholder for the consummation of the transactions
contemplated by the Custody Agreement or this Agreement in
connection with the sale of the Offered Securities sold by the
Selling Stockholders, other than the registration of the Offered
Securities under the Act or approval of the terms of the public
offering of the Offered Security by the NASD (except such counsel
will not express an opinion as to any necessary qualification under
the state securities or blue sky laws of the various jurisdictions
in which the Offered Securities are being offered by the
Underwriters);
(iii) The execution, delivery and performance of the Custody
Agreement and this Agreement and the consummation of the
transactions therein and herein contemplated will not result in a
breach or violation of any of the terms and provisions of, or
constitute a default under, any agreement or instrument to which any
Selling Stockholder is a party or by which any Selling Stockholder
is bound or to which any of the properties of any Selling
Stockholder is subject, of which such counsel is aware;
(iv) The Power of Attorney and related Custody Agreement with
respect to each Selling Stockholder has been duly authorized,
executed and delivered by or on behalf of such Selling Stockholder
and constitute valid and legally binding obligations of each such
Selling Stockholder enforceable in accordance with their respective
terms, except (a) as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally and general principles of
equity, (b) as enforceability of any indemnification provisions may
be limited under federal and state securities or blue sky laws or
public policy, (c) that the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to
equitable defenses, including without limitation concepts of
reasonableness, materiality, good faith and fair dealing and to the
discretion of the court before which any proceeding therefor may be
brought, and (d) to the extent that certain waivers of rights are
void as against public policy; and
(v) This Agreement has been duly authorized, executed and
delivered by each Selling Stockholder.
(f) The Representatives shall have received from King & Spalding,
counsel for the Underwriters, such opinion or opinions, dated such Closing
Date, with respect to the incorporation of the Company, the validity of
the Offered Securities delivered on such Closing Date, the Registration
Statements, the Prospectus and other related matters as the
Representatives may require, and the Selling Stockholders and the Company
shall have furnished to such counsel such documents as they may reasonably
request for the purpose of enabling them to pass upon such matters.
16
(g) The Representatives shall have received a certificate, dated
such Closing Date, of the President or any Vice-President and a principal
financial or accounting officer of the Company in which such officers, to
the best of their knowledge after reasonable investigation, shall state
that: the representations and warranties of the Company in this Agreement
are true and correct; the Company has complied in all material respects
with all agreements and satisfied all conditions on its part to be
performed or satisfied hereunder at or prior to such Closing Date; no stop
order suspending the effectiveness of any Registration Statement has been
issued and no proceedings for that purpose have been instituted or are
contemplated by the Commission; the Additional Registration Statement (if
any) satisfying the requirements of subparagraphs (1) and (3) of Rule
462(b) was filed pursuant to Rule 462(b), including payment of any
applicable filing fee in accordance with Rule 111(a) or (b) under the Act,
prior to the time the Prospectus was printed and distributed to any
Underwriter; and, subsequent to the date of the most recent financial
statements in the Prospectus, there has been no material adverse change,
nor any development or event involving a prospective material adverse
change, in the condition (financial or otherwise), business, properties or
results of operations of the Company except as set forth in or
contemplated by the Prospectus or as described in such certificate.
(h) The Representatives shall have received a letter, dated such
Closing Date, of Coopers & ▇▇▇▇▇▇▇ L.L.P. which meets the requirements of
subsection (a) of this Section, except that the specified date referred to
in such subsection will be a date not more than five days prior to such
Closing Date for the purposes of this subsection.
The Selling Stockholders and the Company will furnish the Representatives with
such conformed copies of such opinions, certificates, letters and documents as
the Representatives reasonably request. CSFBC may in its sole discretion waive
on behalf of the Underwriters compliance with any conditions to the obligations
of the Underwriters hereunder, whether in respect of an Optional Closing Date or
otherwise.
7. Indemnification and Contribution. (a) The Company will indemnify and
hold harmless each Underwriter against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and will reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending any
such loss, claim, damage, liability or action as such expenses are incurred;
provided, however, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement in or omission or alleged
omission from any of such documents in reliance upon and in conformity with
written information furnished to the Company by any Underwriter through the
Representatives specifically for use therein, it being understood and agreed
that the only such information furnished by any Underwriter consists of the
information described as such in subsection (c) below; and provided, further,
that such indemnity with respect to any untrue statement or omission of a
material fact contained in any preliminary prospectus, shall not inure to the
benefit of any Underwriter from whom the person asserting any such losses,
claims, damages or liabilities purchased the shares that are subject thereof if
such person did not receive a copy of the Prospectus (or the
17
Prospectus as supplemented) at or prior to the confirmation of the sale of such
shares to such person in any case where delivery is required under the Act and
such untrue statement or omission of a material fact contained in any
preliminary prospectus was corrected in the Prospectus (or the Prospectus as
supplemented).
(b) The Selling Stockholders severally, and not jointly, will indemnify
and hold harmless each Underwriter against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon
information provided in writing by such Selling Stockholder, upon any untrue
statement or alleged untrue statement of any material fact contained in any
Registration Statement, the Prospectus, or any amendment or supplement thereto,
or any related preliminary prospectus, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading (in
each case only to the extent that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company or any Underwriter
by a Selling Stockholder specifically for use therein) and will reimburse each
Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that each Selling Stockholder will not be liable in any such case to the extent
that any such loss, claim, damage or liability (i) arises out of or is based
upon an untrue statement or alleged untrue statement in or omission from any of
such documents in reliance upon and conformity with written information
furnished to the Company by an Underwriter through the Representatives
specifically for use therein, or (ii) is in excess of the net proceeds of the
Offering received by such Selling Stockholder.
(c) Each Underwriter will severally and not jointly indemnify and hold
harmless the Company and the Selling Stockholders against any losses, claims,
damages or liabilities to which the Company or the Selling Stockholders may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in any Registration Statement, the Prospectus, or any amendment or
supplement thereto, or any related preliminary prospectus, or arise out of or
are based upon the omission or the alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission was
made in reliance upon and in conformity with written information furnished to
the Company by such Underwriter through the Representatives specifically for use
therein, and will reimburse any legal or other expenses reasonably incurred by
the Company and any Selling Stockholder in connection with investigating or
defending any such loss, claim, damage, liability or action as such expenses are
incurred, it being understood and agreed that the only such information
furnished by any Underwriter consists of the following information in the
Prospectus furnished on behalf of each Underwriter: the last paragraph at the
bottom of the cover page concerning the terms of the offering by the
Underwriters, the legend concerning over-allotments and stabilizing on the
inside front cover page and the concession and reallowance figures and statement
regarding discretionary sales appearing in the fourth and fifth paragraphs,
respectively, under the caption "Underwriting."
(d) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party under
subsection (a), (b) or (c) above, notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve it from
18
any liability which it may have to any indemnified party otherwise than under
subsection (a), (b) or (c) above. In case any such action is brought against any
indemnified party and it notifies an indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel reasonably satisfactory to
such indemnified party (who shall not, except with the consent of the
indemnified party, be counsel to the indemnifying party), and after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party will not be liable to such
indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement includes an
unconditional release of such indemnified party from all liability on any claims
that are the subject matter of such action. An indemnifying party will not be
liable for any settlement of any action or claim effected without its written
consent.
(e) If the indemnification provided for in this Section is unavailable or
insufficient to hold harmless an indemnified party under subsection (a), (b) or
(c) above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a), (b) or (c) above (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and each Selling Stockholder on the one hand and the Underwriters on the
other from the offering of the Securities 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 and each Selling Stockholder on
the one hand and the Underwriters on the other in connection with the statements
or omissions which resulted in such losses, claims, damages or liabilities as
well as any other relevant equitable considerations. The relative benefits
received by the Company and each Selling Stockholder on the one hand and the
Underwriters on the other shall be deemed to be in the same proportion as the
total net proceeds from the offering (before deducting expenses) received by the
Company and such Selling Stockholder bear to the total underwriting discounts
and commissions received by the Underwriters. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company, a Selling
Stockholder or the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission. The amount paid by an indemnified party as a result of
the losses, claims, damages or liabilities referred to in the first sentence of
this subsection (e) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any action or claim which is the subject of this subsection (e).
Notwithstanding the provisions of this subsection (e), no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such 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 Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this subsection
(e) to contribute are several in proportion to their respective underwriting
obligations and not joint.
19
(f) The obligations of the Company and the Selling Stockholders under this
Section shall be in addition to any liability which the Company and the Selling
Stockholders may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls any Underwriter within the
meaning of the Act; and the obligations of the Underwriters under this Section
shall be in addition to any liability which the respective Underwriters may
otherwise have and shall extend, upon the same terms and conditions, to each
director of the Company, to each officer of the Company who has signed the
Registration Statement and to each person, if any, who controls the Company
within the meaning of the Act.
8. Default of Underwriters. If any Underwriter or Underwriters default in
their obligations to purchase Offered Securities hereunder on any Closing Date
and the aggregate number of shares of Offered Securities that such defaulting
Underwriter or Underwriters agreed but failed to purchase does not exceed 10% of
the total number of shares of Offered Securities that the Underwriters are
obligated to purchase on such Closing Date, CSFBC may make arrangements
satisfactory to the Company and the Selling Stockholders for the purchase of
such Offered Securities by other persons, including any of the Underwriters, but
if no such arrangements are made by such Closing Date, the non-defaulting
Underwriters shall be obligated severally, in proportion to their respective
commitments hereunder, to purchase the Offered Securities that such defaulting
Underwriters agreed but failed to purchase on such Closing Date. If any
Underwriter or Underwriters so default and the aggregate number of shares of
Offered Securities with respect to which such default or defaults occur exceeds
10% of the total number of shares of Offered Securities that the Underwriters
are obligated to purchase on such Closing Date and arrangements satisfactory to
CSFBC, the Company and the Selling Stockholders for the purchase of such Offered
Securities by other persons are not made within 36 hours after such default,
this Agreement will terminate without liability on the part of any
non-defaulting Underwriter, the Company or the Selling Stockholders, except as
provided in Section 9 (provided that if such default occurs with respect to
Optional Securities after the First Closing Date, this Agreement will not
terminate as to the Firm Securities or any Optional Securities purchased
previously. As used in this Agreement, the term "Underwriter" includes any
person substituted for an Underwriter under this Section. Nothing herein will
relieve a defaulting Underwriter from liability for its default.
9. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Company or its officers, the Selling Stockholders and of the several
Underwriters set forth in or made pursuant to this Agreement will remain in full
force and effect, regardless of any investigation, or statement as to the
results thereof, made by or on behalf of any Underwriter, any Selling
Stockholder, the Company or any of their respective representatives, officers or
directors or any controlling person, and will survive delivery of and payment
for the Offered Securities. If this Agreement is terminated pursuant to Section
8 or if for any reason the purchase of the Offered Securities by the
Underwriters is not consummated, the Company and the Selling Stockholders shall
remain responsible for the expenses to be paid or reimbursed by them pursuant to
Section 5 and the respective obligations of the Company, the Selling
Stockholders, and the Underwriters pursuant to Section 7 shall remain in effect,
and if any Offered Securities have been purchased hereunder the representations
and warranties in Section 2 and all obligations under Section 5 shall also
remain in effect. If the purchase of the Offered Securities by the Underwriters
is not consummated for any reason other than solely because of the termination
of this Agreement pursuant to Section 8 or the occurrence of any event specified
in clause (iii), (iv) or (v) of Section 6(c), the Company will reimburse the
Underwriters for all out-of-pocket expenses (including fees and disbursements of
counsel) reasonably incurred by them in connection with the offering of the
Offered Securities.
20
10. Notices. All communications hereunder will be in writing and, if sent
to the Underwriters, will be mailed or delivered and confirmed to the
Representatives, c/o Credit Suisse First Boston Corporation, Eleven Madison
Avenue, New York, N.Y. 10010, Attention: Investment Banking Department -
Transactions Advisory Group, with a copy to King & Spalding, ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq., or, if
sent to the Company, will be mailed or delivered and confirmed to it at ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇,
with a copy to ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, The ▇▇▇▇▇ Fargo Plaza, 12th Floor, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.,
or, if sent to the Selling Stockholders or any of them, will be mailed,
delivered or telegraphed and confirmed to the Selling Stockholders at the
addresses set forth on Schedule B below each Selling Stockholder's name, with a
copy to Holland & Knight, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.; provided, however, that any
notice to an Underwriter pursuant to Section 7 will be mailed or delivered and
confirmed to such Underwriter.
11. Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective personal representatives and
successors and the officers and directors and controlling persons referred to in
Section 7, and no other person will have any right or obligation hereunder.
12. Representation. The Representatives will act for the several
Underwriters in connection with the transactions contemplated by this Agreement,
and any action under this Agreement taken by the Representatives, jointly or by
CSFBC, will be binding upon all the Underwriters. ▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇ ▇.
▇▇▇▇▇▇ (the "Attorneys") will act for the Selling Stockholders in connection
with such transactions, and any action under or in respect of this Agreement
taken by the Attorneys will be binding upon all the Selling Stockholders.
13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
14. Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, without regard to principles
of conflicts of laws.
The Company and each Selling Stockholder hereby submit to the
non-exclusive jurisdiction of the Federal and state courts in the Borough of
Manhattan in The City of New York in any suit or proceeding arising out of or
relating to this Agreement or the transactions contemplated hereby.
21
If the foregoing is in accordance with the Representatives' understanding
of our agreement, kindly sign and return to the Company three counterparts
hereof, whereupon this Agreement will become a binding agreement among the
Selling Stockholders, the Company and the several Underwriters in accordance
with its terms.
Very truly yours,
THE SELLING STOCKHOLDERS: By:_____________________________________
[Name]
Attorney-in-fact
THE COMPANY: DIGITAL LIGHTWAVE, INC.
By:_____________________________________
Name:
Title:
The foregoing Underwriting Agreement
is hereby confirmed and accepted as of
the date first above written.
CREDIT SUISSE FIRST BOSTON CORPORATION
▇▇▇▇▇▇ ▇▇▇▇
Acting on behalf of themselves and as the
Representatives of the several Underwriters.
By CREDIT SUISSE FIRST BOSTON CORPORATION
By:___________________________________
Name:
Title:
22
SCHEDULE A
Number of
Firm Securities
Underwriter to be Purchased
----------- ---------------
Credit Suisse First Boston Corporation......
▇▇▇▇▇▇ ▇▇▇▇ LLC.............................
----------
Total .................. 4,000,000
==========
SCHEDULE B
Number of
Firm Securities
Selling Stockholder to be Sold
------------------- ----------
Norton ▇. ▇▇▇▇▇ 300,000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 225,334
▇▇▇▇▇▇▇▇▇ Capital Corp. 116,420
▇▇▇▇ ▇▇▇▇▇▇▇ 69,453
▇▇▇▇▇▇▇ ▇. ▇▇▇▇ 66,801
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ 5,760
▇▇▇▇▇▇ ▇. and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 6,339
▇▇▇▇▇▇▇ ▇. ▇▇▇▇ 8,001
▇▇▇▇▇▇ ▇▇▇▇▇ 8,001
Jakob Kryszek 6,334
▇▇▇▇▇▇ ▇. ▇▇▇▇ 4,667
ASK ▇▇▇▇▇ Trust 4,667
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 3,267
▇▇▇▇▇ & ▇▇▇▇ ▇▇▇▇▇ 3,134
▇▇▇▇ ▇. ▇▇▇▇▇ Residuary Trust 3,134
Venture Tech Investors 2,934
▇▇▇▇ ▇▇▇▇▇▇▇ 2,334
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 2,801
Monte Factor TTEE under the will of ▇▇▇ ▇. Factor 1,867
▇▇▇▇ ▇▇▇▇▇ 1,334
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 5,418
--------
Total..................................... 848,000
========