EXHIBIT 1.02
DRAFT 10/17/96
--------------
2,000,000 Shares
VIVID TECHNOLOGIES, INC.
Common Stock
INTERNATIONAL UNDERWRITING AGREEMENT
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______ ___,1996
▇▇▇▇▇▇ BROTHERS INTERNATIONAL (EUROPE)
▇▇▇▇▇ & COMPANY
▇▇▇▇▇▇▇ & COMPANY, INC.
As Lead Managers of the several
International Managers named in Schedule 1,
c/▇ ▇▇▇▇▇▇ Brothers International (Europe)
▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇
Dear Sirs:
Vivid Technologies, Inc., a Delaware corporation (the "Company"),
proposes to sell an aggregate of __________ shares (the "Firm Stock") of the
Company's Common Stock, par value $.01 per share (the "Common Stock"). In
addition, the Company proposes to grant to the International Managers named in
Schedule I hereto (the "International Managers") an option to purchase up to an
additional _________ 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 by the International Managers.
It is understood by all parties that the Company is concurrently
entering into an agreement dated the date hereof (the "U.S. Underwriting
Agreement") providing for the sale by the Company of an aggregate of ________
shares of Common Stock (including the over-allotment option thereunder) (the
"U.S. Stock") through arrangements with certain underwriters in the United
States and Canada (the "U.S. Underwriters"), for whom ▇▇▇▇▇▇ Brothers Inc.,
▇▇▇▇▇ & Company and ▇▇▇▇▇▇▇ & Company, Inc. are acting as representatives (the
"Representatives"). The International Managers and the U.S. Underwriters
simultaneously are entering into an agreement between the U.S. and International
underwriting syndicates (the "Agreement Between U.S. Underwriters and
International Managers") which provides for, among other things, the transfer of
shares of Common Stock between the two syndicates. Two forms of prospectus are
to be used in connection with the offer and sale of shares of Common Stock
contemplated by the foregoing, one relating to the Stock and the other relating
to the U.S.
Stock. The latter form of prospectus will be identical to the former except for
certain substitute pages as included in the registration statement and
amendments thereto referred to below. Except as used in the first paragraph
hereof and in Sections 2, 3, 4, 9 and 10 herein, and except as the context may
otherwise require, references herein to the Stock shall include all the shares
of the Common Stock which may be sold pursuant to either this Agreement or the
U.S. Underwriting Agreement, and references herein to any prospectus whether in
preliminary or final form, and whether as amended or supplemented, shall include
both the U.S. and the international versions thereof.
1. Representations, Warranties and Agreements of the Company. The
Company represents, warrants and agrees that:
(a) Each of the registration statement on Form S-1, and any
registration statement filed pursuant to Rule 462(b) of the Rules and
Regulations (as hereinafter defined), and any amendments thereto, with
respect to the Stock has (i) been prepared by the Company in conformity
with the requirements of the United States Securities Act of 1933 (the
"Securities Act") and the rules and regulations (the "Rule 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 each of such registration statement, including any registration
statement filed pursuant to Rule 462(b), and the amendments thereto have
been delivered by the Company to you as the lead managers (the "Lead
Managers") of the International Managers and such copies, to the extent
applicable, were identical to the electronically transmitted copies thereof
filed with the Commission pursuant to the Commission's Electronic Data
Gathering, Analysis and Retrieval System ("▇▇▇▇▇"), except to the extent
permitted by Regulation S-T. 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 with the consent of the Representatives 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___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. For purposes of this Agreement, all references to any
Preliminary Prospectus, the Registration Statement, any
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Rule 462(b) Registration Statement, the Prospectus, or any amendment or
supplement to any of the foregoing, shall be deemed to include the
respective copies thereof filed with the Commission pursuant to ▇▇▇▇▇.
(b) The Registration Statement, including any Rule 462(b) Registration
Statement, conforms, and the Prospectus and any further amendments or
supplements to the Registration Statement, including any Rule 462(b)
Registration Statement, or the Prospectus, when they become effective or
are filed with the Commission, as the case may be, will 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, including any Rule 462(b) 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 International Manager specifically for inclusion therein.
(c) The Company and each of its subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation, 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 or hold its properties and to conduct the business in
which it is engaged; and none of the subsidiaries is a "significant
subsidiary," as such term is defined in Rule 405 of the Rules and
Regulations.
(d) The Company has an authorized and outstanding capitalization as
set forth in the Prospectus, and all of the issued shares of capital stock
of the Company have been duly and validly authorized and issued, are fully
paid and non-assessable and conform to the description thereof contained in
the Prospectus. Upon the closing of the Offering, no shares of capital
stock of the Company will be outstanding other than the Common Stock; 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 International Managers hereunder and the U.S. Underwriters
under the U.S. Underwriting Agreement have been duly and validly authorized
and, when issued and delivered against payment therefor as provided herein
and the U.S. Underwriting Agreement, will be duly and validly issued, fully
paid and non-assessable; and the Stock will conform to the descriptions
thereof contained in the Prospectus.
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(f) This Agreement has been duly authorized, executed and delivered by
the Company.
(g) The execution, delivery and performance of this Agreement and the
U.S. Underwriting Agreement by the Company and the consummation 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 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, 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 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 United States Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and applicable state or foreign securities
laws and clearance by the National Association of Securities Dealers Inc.
in connection with the purchase and distribution of the Stock by the
International Managers and the U.S. 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 or the U.S. Underwriting Agreement by the
Company and the consummation of the transactions contemplated hereby and
thereby.
(h) Except as described in the Prospectus, 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 Prospectus, 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, 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,
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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
general affairs, management, financial position, stockholders' equity or
results of operations of the Company and its subsidiaries taken as a whole,
otherwise than as set forth or contemplated in 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 (except in the case of
unaudited interim financial statements for normal recurring adjustments)
applied on a consistent basis throughout the periods involved, except as
otherwise stated therein.
(l) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, who have certified certain financial
statements of the Company, whose report appears in the Prospectus and who
have delivered the initial letters 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 together with its subsidiaries have good and
marketable title to all real and personal property owned by them, in each
case free and clear of all liens, encumbrances and defects except such as
are described in the Prospectus or such as do not materially affect the
value of such property and do not materially interfere with the use made
and proposed to be made of such property by the Company and its
subsidiaries taken as a whole; and, except as set forth or contemplated in
the Prospectus, all real property and buildings held under lease by the
Company and its subsidiaries are held by it under valid, subsisting and
enforceable leases, with such exceptions as are not material and do not
interfere with the use made and proposed to be made of such property and
buildings by the Company and its subsidiaries taken as a whole.
(n) The Company together with its subsidiaries carry or are covered
by, insurance in such amounts and covering such risks as is adequate for
the conduct of their respective businesses and the value of their
properties and as is customary for companies engaged in similar businesses
in similar industries.
(o) Except as disclosed in or specifically contemplated by the
Prospectus, the Company and its subsidiaries own or possess adequate rights
to use all trademarks, trademark applications, trade names, service marks,
patents, patent applications, patent rights, copyrights, inventions, trade
secrets, know how, licenses, approvals and governmental authorizations that
are necessary to conduct their business as described in the Registration
Statement and Prospectus; the expiration of any trademarks, trademark
applications, trade names, service marks, patents, patent applications,
patent rights,
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copyrights, inventions, trade secrets, know how, licenses, approvals and
governmental authorizations would not have a material adverse effect on the
earnings, business, management, properties, assets, rights, operations,
condition (financial or otherwise) or prospects of the Company or its
subsidiaries; to the knowledge of the Company, none of the patents owned or
licensed by the Company are unenforceable or invalid; the Company has duly
and properly filed or caused to be filed with the United States Patent and
Trademark Office (the "PTO") and applicable foreign and international
patent authorities all patent applications described or referred to in the
Prospectus, and the Company is unaware of any facts which would preclude
the grant of a patent from any of its patent applications; the Company has
no knowledge of any facts which would preclude it from having clear title
to its patent applications referenced in the Prospectus; except as
described in the Prospectus, the Company has no knowledge of, and has
received no notice of, any material infringement or misappropriation by the
Company of any trademark, trademark application, trade name, service ▇▇▇▇,
patent, patent application, patent right, mask work, copyright, invention,
know how, license, trade secret or other similar rights of others; the
Company has not terminated or breached and is not in violation of any
agreement covering its intellectual property rights; and the Company and
its subsidiaries taken as a whole 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 rights of third
parties to any of the intellectual property of the Company or its
subsidiaries.
(p) Except as described in the Prospectus, 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 on the financial position, stockholders' equity, results of
operations, business or prospects of the Company and its subsidiaries taken
as a whole; and to the best of the Company's knowledge, no such proceedings
are threatened or contemplated by governmental authorities or threatened by
others.
(q) 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 or incorporated therein by reference as permitted by
the Rules and Regulations.
(r) 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.
(s) No labor disturbance by the employees of the Company exists or, to
the knowledge of the Company, is imminent which might be expected to have a
material
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adverse effect on the financial position, stockholders' equity, results of
operations, business or prospects of the Company and its subsidiaries.
(t) The Company and its subsidiaries are 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.
(u) The Company 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 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, is reasonably likely to have) a
material adverse effect on the financial position, stockholders' equity,
results of operations, business or prospects of the Company and its
subsidiaries taken as a whole, otherwise than as set forth in the
Prospectus.
(v) 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 and transaction not in the ordinary course of
business or (iv) declared or paid any dividend on its capital stock.
(w) The Company (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.
(x) Neither the Company nor any of its subsidiaries (i) is in
violation of its 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
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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.
(y) Neither the Company nor any of its subsidiaries, nor any director,
officer, agent, employee or other person associated with or acting on
behalf of the Company or any of its subsidiaries, has used any corporate
funds for any unlawful contribution, gift, entertainment or other unlawful
expense relating to political activity; made any direct or indirect
unlawful payment to any foreign or domestic government official or employee
from corporate funds; violated or is in violation of any provision of the
Foreign Corrupt Practices Act of 1977; or made any bribe, rebate, payoff,
influence payment, kickback or other unlawful payment.
(z) There has been no storage, disposal, generation, manufacture,
refinement, transportation, handling or treatment of toxic wastes, medical
wastes, hazardous wastes or hazardous substances by the Company or any of
its subsidiaries (or, to the knowledge of the Company, any of their
predecessors in interest) at, upon or from any of the property now or
previously owned or leased by the Company or its subsidiaries in violation
of any applicable law, ordinance, rule, regulation, order, judgment, decree
or permit or which would require remedial action under any applicable law,
ordinance, rule, regulation, order, judgment, decree or permit, except for
any violation or remedial action which would not have, or could not be
reasonably likely to have, singularly or in the aggregate with all such
violations and remedial actions, a material adverse effect on the general
affairs, management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries; there has been no material
spill, discharge, leak, emission, injection, escape, dumping or release of
any kind onto such property or into the environment surrounding such
property of any toxic wastes, medical wastes, solid wastes, hazardous
wastes or hazardous substances due to or caused by the Company or any of
its subsidiaries or with respect to which the Company or any of its
subsidiaries have knowledge, except for any such spill, discharge, leak,
emission, injection, escape, dumping or release which would not have or
would not be reasonably likely to have, singularly or in the aggregate with
all such spills, discharges, leaks, emissions, injections, escapes,
dumpings and releases, a material adverse effect on the general affairs,
management, financial position, stockholders' equity or results of
operations of the Company and it subsidiaries; and 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.
(aa) Neither the Company nor any of its subsidiaries is, or will
become as a result of the consummation of the transactions contemplated by
this Agreement or the International Underwriting Agreement, 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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2. Purchase of the Stock by the International Managers. 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 _________
shares of the Firm Stock to the several International Managers and each of the
International Managers, severally and not jointly, agrees to purchase the number
of shares of the Firm Stock set opposite that International Manager's name in
Schedule 1 hereto. Each International Manager shall be obligated to purchase
form the Company 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 as the number of shares of the Firm Stock set forth opposite the name of
such International Manager in Schedule 1 represents of the total number of
shares of the Firm Stock to be purchased by all of the International Managers
pursuant to this Agreement. The respective purchase obligations of the
International Managers with respect to the Firm Stock shall be rounded among the
International Managers to avoid fractional shares, as the Lead Managers may
determine.
In addition, the Company grants to the International Managers an
option to purchase up to _________ shares of Option Stock. Such option is
granted solely for the purpose of covering over-allotments in the sale of Firm
Stock and is exercisable as provided in Section 4 hereof. Shares of Option
Stock shall be purchased severally for the account of the International Managers
in proportion to the number of shares of Firm Stock set opposite the name of
such International Managers in Schedule 1 hereto. The respective obligations of
each International Manager with respect to the Option Stock shall be adjusted by
the Lead Managers so that commitments to purchase Option Stock shall be
proportionate to such International Manager's initial commitment as provided in
Schedule 1. Such respective purchase obligations with respect to the Option
Stock shall be rounded among the International Managers to avoid fractional
shares, as the Lead Managers may determine. The price of both the Firm Stock
and any Option Stock shall be $_____ per share.
3. Offering of Stock by the International Managers. Upon
authorization by the Lead Managers of the release of the Firm Stock, the several
International Managers propose to offer the Firm Stock for sale upon the terms
and conditions set forth in the Prospectus.
Each International Manager agrees that, except to the extent permitted
by the Agreement Between U.S. Underwriters and International Managers, it will
not offer or sell any of the Stock outside of the United States.
4. Delivery of and Payment for the Stock. Delivery of and payment
for the Firm Stock shall be made at the office of ▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇,
LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, at 10:00 A.M., Eastern time, on the
third full business day (unless otherwise required by the Commission pursuant to
Rule 15c6-1 of the Exchange Act) following the date of this Agreement or at such
other date or place as shall be determined by agreement between the Lead
Managers and the Company. This date and time are sometimes referred to as the
"First Delivery Date." On the First Delivery Date, the Company shall deliver or
cause to be delivered certificates representing the Firm Stock to the Lead
Managers for the account of each International Manager against payment to or
upon the order of the Company of the purchase
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price by wire transfer in next-day funds. Time shall be of the essence, and
delivery at the time and place specified pursuant to this Agreement is a further
condition of the obligation of each International Manager hereunder. Upon
delivery, the Firm Stock shall be registered in such names and in such
denominations as the Lead Managers shall request in writing not less than two
full business days prior to the First Delivery Date. For the purpose of
expediting the checking and packaging of the certificates for the Firm Stock,
the Company shall make the certificates representing the Firm Stock available
for inspection by the Lead Managers in New York, New York, not later than 2:00
P.M., Eastern time, on the business day prior to the First Delivery Date.
At any time on or before the thirtieth day after the date of this
Agreement the option granted in Section 2 may be exercised by written notice
being given to the Company by the Lead Managers. Such notice shall set forth
the aggregate number of shares of Option Stock as to which the option is being
exercised, the names in which the shares of Option Stock are to be registered,
the denominations in which the shares of Option Stock are to be issued and the
date and time, as determined by the Lead Managers, 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
third 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 the "Second Delivery Date" and the First Delivery Date and the
Second Delivery Date are sometimes each referred to as a "Delivery Date").
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 Lead
Managers and the Company) at 10:00 A.M., New York City time, on the Second
Delivery Date. On the Second Delivery Date, the Company shall deliver or cause
to be delivered the certificates representing the Option Stock to the Lead
Managers for the account of each International Manager against payment to or
upon the order of the Company of the purchase price by wire transfer in next-day
funds. Time shall be of the essence, and delivery at the time and place
specified pursuant to this Agreement is a further condition of the obligation of
each International Manager hereunder. Upon delivery, the Option Stock shall be
registered in such names and in such denominations as the Lead Managers shall
request in the aforesaid written notice. For the purpose of expediting the
checking and packaging of the certificates for the Option Stock, the Company
shall make the certificates representing the Option Stock available for
inspection by the Lead Managers in New York, New York, not later than 2:00 P.M.,
New York City time, on the business day prior to the Second Delivery Date.
5. Further Agreements of the Company. The Company agrees:
(a) To prepare the Prospectus in a form approved by the Lead Managers
and to file such Prospectus pursuant to Rule 424(b) under the Securities
Act not later than 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
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Lead Managers, 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 Lead
Managers with copies thereof; to advise the Lead Managers, 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 Lead Managers and to counsel
for the International Managers 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 Lead Managers such number of the
following documents as the Lead Managers 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 other than this
Agreement and the 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 the light of the circumstances under which they were
made when such Prospectus is delivered, not misleading, or, if for any
other reason it shall be necessary to amend or supplement the Prospectus in
order to comply with the Securities Act, to notify the Lead Managers and,
upon their request, to prepare and furnish without charge to each
International Manager and to any dealer in securities as many copies as the
Lead Managers may from time to time reasonably request of an amended or
supplemented Prospectus which will correct such statement or omission or
effect such compliance. To the extent applicable, the copies of the
Registration Statement and each amendment thereto (including all exhibits
filed therewith), including any Rule 462(b) Registration Statement, any
Preliminary Prospectus or Prospectus (in each case, as amended or
supplemented) furnished to the International Managers and counsel to the
International Managers will be identical to the electronically transmitted
copies thereof filed with the Commission pursuant to ▇▇▇▇▇, except to the
extent permitted by Regulation S-T;
-11-
(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 Lead Managers, be required by the Securities
Act or requested by the Commission;
(e) Prior to filing with the Commission any amendment to the
Registration Statement, including any filing required under Rule 462(b), or
supplement to the Prospectus or any Prospectus pursuant to Rule 424 of the
Rules and Regulations, to furnish a copy thereof to the Lead Managers and
counsel for the International Managers and obtain the consent of the Lead
Managers to the filing;
(f) As soon as practicable after the Effective Date, to make generally
available to the Company's shareholders and to deliver to the Lead Managers
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 Lead Managers copies of all materials furnished by the
Company to its shareholders 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; and to the extent applicable, such reports or documents shall
be identical to the electronically transmitted copies thereof filed with
the Commission pursuant to ▇▇▇▇▇, except to the extent permitted by
Regulation S-T.
(h) Promptly from time to time to take such action as the Lead
Managers may reasonably request to qualify the Stock for offering and sale
under the securities laws of such jurisdictions as the Lead Managers 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;
(i) For a period of 180 days from the date of the Prospectus, not to
offer for sale, sell or otherwise dispose of (or enter into any transaction
which is designed to, or could be expected to, result in the disposition by
any person of), directly or indirectly, any shares of Common Stock (other
than the Stock and shares issued pursuant to employee benefit plans, stock
option plans or other employee compensation plans existing on the date
hereof or pursuant to currently outstanding options, warrants or rights),
or sell or grant options, rights or warrants with respect to any shares of
Common Stock (other than the grant of options pursuant to option plans
existing on the date hereof), without the prior written consent of ▇▇▇▇▇▇
Brothers Inc.; and to cause each officer and director and each record owner
of shares of Common Stock and Preferred Stock of the Company other than
those record owners listed in writing by the Company to ▇▇▇▇▇▇ Brothers,
Inc. and approved by it prior to the First Delivery Date, to furnish to
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the Lead Managers, prior to the First Delivery Date, a letter or letters,
in form and substance satisfactory to counsel for the International
Managers, pursuant to which each such person shall agree not to offer for
sale, sell or otherwise dispose of (or enter into any transaction which is
designed to, or could be expected to, result in the disposition by any
person of), directly or indirectly, any shares of Common Stock for a period
of 180 days from the date of the Prospectus, without the prior written
consent of ▇▇▇▇▇▇ Brothers Inc.; for a period of 180 days from the date of
the Prospectus, except as required by law, the board of directors of the
Company will not consent to any offer for sale, sale or other disposal of
(or consent to any transaction which is designed, or could be expected to,
result in the disposition by any person of), directly or indirectly, any
shares of Common Stock without the prior written consent of ▇▇▇▇▇▇ Brothers
Inc.;
(j) Prior to the Effective Date, to apply for the listing of the Stock
on the Nasdaq National Market and to use its best efforts to complete that
listing, subject only to official notice of issuance and evidence of
satisfactory distribution, prior to the First Delivery Date;
(k) Prior to filing with the Commission any reports on Form SR
pursuant to Rule 463 of the Rules and Regulations, to furnish a copy
thereof to the counsel for the International Managers and receive and
consider its comments thereon, and to deliver promptly to the Lead Managers
a signed copy of each report on Form SR filed by it with the Commission;
(l) To apply the net proceeds from the sale of the Stock being sold by
the Company as set forth in the Prospectus; and
(m) 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.
6. 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, the Agreement Between U.S. Underwriters and International
Managers and the Supplemental Agreement Among U.S. Underwriters and any other
related documents in connection with the offering, purchase, sale and delivery
of the Stock; (e) the costs of delivering and distributing the terms of
agreement relating to the organization of the domestic underwriting syndicate
and selling group to the members thereof by mail, telex or other means of
communications; (f) the filing fees incident to securing any required review by
the National Association of Securities Dealers, Inc. of the terms of sale of
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the Stock; (g) any applicable listing or other fees; (h) the fees and expenses
of qualifying the Stock under the securities laws of the several jurisdictions
as provided in Section 5(h) and of preparing, printing and distributing a Blue
Sky Memorandum (including related fees and expenses of counsel to the
International Managers); (k) all other costs and expenses incident to the
performance of the obligations of the Company under this Agreement; provided
that, except as provided in this Section 6 and in Section 11 the International
Managers shall pay their owns 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
International Managers.
7. Conditions of International Managers' Obligations. The
respective obligations of the International Managers hereunder are subject to
the accuracy, when made and on each Delivery Date, of the representations and
warranties of the Company contained herein, to the performance by the Company of
its 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, including any Rule 462(b) 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 U.S. Underwriter or International Manager shall have discovered
and disclosed to the Company on or prior to such Delivery Date that the
Registration Statement, any Rule 462(b) 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 International Managers, 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 International
Underwriting Agreement, 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 International Managers, and the
Company shall have furnished to such counsel all documents and information
that they may reasonably request to enable them to pass upon such matters.
(d) Brown, Rudnick, Freed & Gesmer shall have furnished to the Lead
Managers its written opinion, as counsel to the Company, addressed to the
International Managers and dated such Delivery Date, in form and substance
reasonably satisfactory to the Lead Managers, to the effect set forth in
Annex A hereto;
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In rendering such opinion, such counsel may state that (i) its opinion
is limited to matters governed by the Federal laws of the United States of
America and the General Corporation Law of the State of Delaware and that
such counsel is not admitted in the State of Delaware; and (ii) in giving
the opinion referred to in Section 7(i), state that it is relying upon
opinions of foreign counsel for certain subsidiaries and, with respect to
matters of fact, upon certificates of officers of the Company or its
subsidiaries, provided that such counsel shall state that it believes that
the International Managers and it are justified in relying upon such
opinions and certificates. Such counsel shall also have furnished to the
Lead Managers a written statement, addressed to the International Managers
and dated such Delivery Date, in form and substance satisfactory to the
Lead Managers, to the effect that such counsel has participated in
conferences with officers and other Lead Managers of the Company,
representatives of the independent public accountants for the Company, the
Lead Managers and counsel for the Lead Managers at which the contents of
the Registration Statement and the Prospectus and related matters were
discussed and, although such counsel is not passing upon and does not
assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement and the Prospectuses
(except for the statements made in the Prospectus under the captions
"Description of Capital Stock," and "Business--Legal Proceedings" insofar
as such statements constitute a summary of documents referred to therein or
matters of law constitute an accurate summary of the matters described
therein) and 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 (it being understood that such counsel is
not requested to and need not express any comment with respect to the
financial statements and schedules and other financial and statistical data
included in the Registration Statement or Prospectus).
(e) ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP shall have furnished to the Lead Managers its
written opinion, as patent counsel to the Company, addressed to the
International Managers and dated such Delivery Date, in form and substance
reasonably satisfactory to the Lead Managers, to the effect set forth in
Annex B hereto;
(f) The Lead Managers shall have received from ▇▇▇▇▇, ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇▇, LLP, counsel for the International Managers, 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 Lead Managers 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 Lead Managers
shall have received from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ a letter, in form and substance
satisfactory to the Lead
-15-
Managers, addressed to the International Managers 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 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP referred to in
the preceding paragraph and delivered to the Lead Managers concurrently
with the execution of this Agreement (the "initial letter"), the Company
shall have furnished to the Lead Managers a letter (the "bring-down
letter") of such accountants, addressed to the International Managers 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 Lead Managers 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 complied with all its agreements contained herein; and the
conditions set forth in Sections 7(a) and 7(m) 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) (i) 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
-16-
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 change, or any development involving a prospective change, in or
affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company, otherwise
than as set forth or contemplated in the Prospectus, the effect of which,
in any such case described in clause (i) or (ii), is, in the judgment of
the Lead Managers, 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.
(k) 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 several International Managers,
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.
(l) The Nasdaq National Market shall have approved the Stock for
listing, subject only to official notice of issuance and evidence of
satisfactory distribution.
(m) The closing under the International Underwriting Agreement shall
have occurred concurrently with the closing hereunder on the First Delivery
Date.
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 International Managers.
8. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each International
Manager, its officers and employees and each person, if any, who controls
any International Manager within the meaning of the Securities Act, from
and against any
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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 International Manager, 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 (A) in any Preliminary Prospectus, the Registration Statement or
the Prospectus or in any amendment or supplement thereto or (B) in any blue
sky application or other document prepared or executed by the Company (or
based upon any written information furnished by the Company) specifically
for the purpose of qualifying any or all of the Stock under the securities
laws of any state or other jurisdiction (any such application, document or
information being hereinafter called a "Blue Sky Application"), (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,
or (iii) any act or failure to act or any alleged act or failure to act by
any International Manager 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 the Company shall not 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 directly from any such acts or failures to act undertaken or
omitted to be taken by such International Manager through its gross
negligence or willful misconduct), and shall reimburse each International
Manager and each such officer, employee or controlling person promptly upon
demand for any legal or other expenses reasonably incurred by that
International Manager, officer, employee or controlling person in
connection with investigating or defending or preparing to defend against
such loss, claim, damage, liability or action as such expenses are
incurred; and, provided, further, however, that the Company 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, or in any Blue Sky Application, in
reliance upon and in conformity with written information concerning such
International Manager furnished to the Company through the Lead Managers by
or on behalf of any International Manager or any International Manager
specifically for inclusion therein. The foregoing indemnity agreement is in
addition to any liability which the Company may otherwise have to any
International Manager or to any officer, employee or controlling person of
that International Manager.
(b) Each International Manager, severally and not jointly, shall
indemnify and hold harmless the Company, its officers and employees, each
of its directors, and each person, if any, who controls the Company 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 or any such director, officer or controlling person may
-18-
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 (A) in any Preliminary Prospectus, the Registration Statement or
the Prospectus or in any amendment or supplement thereto, or (B) in any
Blue Sky Application 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 International Manager furnished to the Company
through the Lead Managers by or on behalf of that International Manager
specifically for inclusion therein, and shall reimburse the Company and any
such director, officer or controlling person for any legal or other
expenses reasonably incurred by the Company 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 International Manager may otherwise
have to the Company or any such director, officer, employee or controlling
person.
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of any claim or the commencement of any action, the identified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, 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 8 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 8. 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 8 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 Lead Managers shall have the right to employ counsel to
represent jointly the Lead Managers and those other International Managers
and their respective 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 International Managers against the Company under this
Section 8 if, in the reasonable judgment of the Lead Managers, it is
advisable for the Lead Managers and those International Managers, officers,
employees and controlling persons to be jointly represented by separate
counsel, and in that event the fees and expenses of
-19-
such separate counsel shall be paid by the Company. 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 or consent includes an
unconditional release of each indemnified party from all liability arising
out of such claim, action, suit or proceeding, 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 of 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.
(d) If the indemnification provided for in this Section 8 shall for
any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 8(a), 8(b) or 8(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 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 on the one hand
and the International Managers on the other 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 on the one hand and the International Managers on the
other 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 on the one hand and the International Managers on
the other 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, on the one hand, and the total underwriting discounts and
commissions received by the International Managers 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 or omission or alleged omission to state a material fact relates to
information supplied by the Company or the International Managers, the
intent of the parties and their relative knowledge, access to information
and opportunity to correct or prevent such statement or omission. The
Company and the International Managers agree that it would not be just and
equitable if contributions pursuant to this Section were to be determined
by pro rata allocation (even if the International Managers 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
-20-
indemnified party as a result of the loss, claim, damage or liability, or
action in respect thereof, referred to above in this Section shall be
deemed to include, for purposes of this Section 8(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 8(d), no International Manager 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
International Manager 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 10(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
International Managers' obligations to contribute as provided in this
Section 8(e) are several in proportion to their respective underwriting
obligations and not joint.
(e) The International Managers severally confirm that the statements
with respect to the public offering of the Stock by the International
Managers set forth on the cover page of, the legend concerning over-
allotments on the inside front cover page and the concession and
reallowance figures appearing under the caption "Underwriting" in, the
Prospectus are correct and constitute the only information concerning such
International Managers furnished in writing to the Company by or on behalf
of the International Managers or International Managers specifically for
inclusion in the Registration Statement and the Prospectus.
9. Defaulting International Managers.
If, on either Delivery Date, any International Manager defaults in the
performance of its obligations under this Agreement, the remaining non-
defaulting International Managers shall be obligated to purchase the Stock which
the defaulting International Manager 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 International
Manager 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 International
Managers in Schedule I hereto; provided, however, that the remaining non-
defaulting International Managers 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 International Manager or Managers 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 International
Manager 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 the terms of Section 2. If the foregoing maximums are exceeded, the
remaining non-defaulting International Managers, or those other underwriters
satisfactory to the Lead Managers who so agree, shall have the right, but shall
not be obligated, to purchase, in such proprotion as may be agreed upon among
them, all the Stock to be purchased on such Delivery Date. If the remaining
International Managers or other underwriters satisfactory to the Lead Managers
do not elect to purchase the shares which the defaulting International Manager
or
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Managers agreed but failed to purchase on such Delivery Date, this Agreement
(or, with respect to the Second Delivery Date, the obligation of the
International Managers to purchase, and of the Company to sell, the Option
Stock) shall terminate without liability on the part of any non-defaulting
International Manager or the Company, except that the Company will continue to
be liable for the payment of expenses to the extent set forth in Sections 6 and
11. As used in this Agreement, the term "International Manager" 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 9, purchases Firm
Stock which a defaulting International Manager agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting International
Manager of any liability it may have to the Company for damages caused by its
default. If other underwriters are obligated or agree to purchase the Stock of
a defaulting or withdrawing International Manager, either the Lead Managers 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 International Managers may be necessary in the Registration
Statement, the Prospectus or in any other document or arrangement.
10. Termination. The obligations of the International Managers
hereunder may be terminated by the Lead Managers by notice given to and received
by the Company prior to delivery of and payment for the Firm Stock if, prior to
that time, any of the events described in Sections 9(i) or 9(j), shall have
occurred or the event described in Section 7(k) shall not have occurred or if
the International Managers shall decline to purchase the Stock for any reason
permitted under this Agreement.
11. Reimbursement of International Managers' Expenses. If (a) the
Company shall fail to tender the Stock for delivery to the International
Managers by reason of any failure, refusal or inability on the part of the
Company to perform any agreement on its part to be performed, or because any
other condition of the International Managers' obligations hereunder required to
be fulfilled by the Company is not fulfilled, the Company will reimburse the
International Managers for all reasonable out-of-pocket expenses (including fees
and disbursements of counsel) incurred by the International Managers in
connection with this Agreement and the proposed purchase of the Stock, and upon
demand the Company shall pay the full amount thereof to the Lead Managers. If
this Agreement is terminated pursuant to Section 9 by reason of the default of
one or more International Managers, the Company shall not be obligated to
reimburse any defaulting International Manager on account of those expenses.
12. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the International Managers, shall be delivered or sent by
mail, telex or facsimile transmission to ▇▇▇▇▇▇ Brothers International
(Europe), ▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, Attention: Syndicate
Department (Fax:________), with a copy, in the case of any notice pursuant
to Section 8(d), to the Director of Litigation, Office of the General
Counsel, ▇▇▇▇▇▇ Brothers Inc., 3 World Financial Center, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
-▇▇-
▇▇▇▇, ▇▇ ▇▇▇▇▇, with a copy to ▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., Esq.;
(b) if to the Company, shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: President (Fax: ▇▇▇-▇▇▇-▇▇▇▇), with a
copy to Brown, Rudnick, Freed & Gesmer, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.;
provided, however, that any notice to an International Manager pursuant to
Section 8(d) shall be delivered or sent by mail, telex or facsimile transmission
to such International Manager at its address set forth in its acceptance telex
to the Lead Managers, which address will be supplied to any other party hereto
by the Lead Managers upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company shall
be entitled to act and rely upon any request, consent, notice or agreement given
or made on behalf of the International Managers by ▇▇▇▇▇▇ Brothers Inc. on
behalf of the Lead Managers.
13. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the International Managers, the
Company 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 contained in this Agreement shall also be deemed to be
for the benefit of the person or persons, if any, who control any International
Manager within the meaning of Section 15 of the Securities Act and for the
benefit of each International Manager (and controlling persons thereof) who
offers or sells shares of Common Stock in accordance with the terms of the
Agreement between International Managers and International Managers and (B) the
indemnity agreement of the International Managers contained in Section 8(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 13, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision contained herein.
14. Survival. The respective indemnities, representations,
warranties and agreements of the Company and the International Managers
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.
15. Definition of the Term "Business Day". For purposes of this
Agreement, "business day" means any day on which the New York Stock Exchange,
Inc. is open for trading.
16. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of New York.
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17. Jurisdiction. The parties hereto each hereby irrevocably submits
to the jurisdiction of any New York state or federal court sitting in the city
of New York, New York County, in any action or proceeding arising out of or
relating to this Agreement and the parties hereto each hereby irrevocably agrees
that all claims in respect of such action or proceeding may be heard and
determined in such New York state court or such federal court. The parties
hereto also each hereby irrevocably waives, to the fullest extent it may
effectively do so, the defense of an inconvenient forum to the maintenance of
such action or proceeding. The parties hereto each irrevocably consent to the
service of copies of the summons and complaint and any other process which may
be served in any such action or proceeding by certified mail, return receipt
requested, or by delivery of a copy of such process to the parties at its
address specified in Section 14 or by any other method permitted by law. The
parties hereto each agree that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or by any other manner provided by law.
18. 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.
19. 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]
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If the foregoing correctly sets forth the agreement among the Company and
the International Managers, please indicate your acceptance in the space
provided for that purpose below.
Very truly yours,
VIVID TECHNOLOGIES, INC.
By
-----------------------
President
Accepted:
▇▇▇▇▇▇ BROTHERS INTERNATIONAL (EUROPE)
▇▇▇▇▇ & COMPANY
▇▇▇▇▇▇▇ & COMPANY, INC.
For themselves and as
Lead Managers of the
several International Managers
named in Schedule 1 hereto
By: ▇▇▇▇▇▇ BROTHERS INTERNATIONAL (EUROPE)
By
-------------------------
Authorized Representative
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SCHEDULE 1
Underwriters Number of Shares
------------ ----------------
▇▇▇▇▇▇ Brothers International (Europe)...................
▇▇▇▇▇ & Company..........................................
▇▇▇▇▇▇▇ & Company, Inc. .................................
Total.................................................... ----------------
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ANNEX A
Matters to be Covered in Opinion of Company Counsel
---------------------------------------------------
(i) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of its jurisdiction of
incorporation, is duly qualified to do business and is in good standing as
a foreign corporation in each jurisdiction in which its ownership or
leasing of property or the conduct of its business requires such
qualification (except where non-qualification would not have a material and
adverse affect on the business, properties, business prospects, condition
(financial or otherwise) or results of operations of the Company and its
subsidiaries taken as a whole (a "Material Adverse Effect")) and has the
corporate power and authority necessary to own or hold its properties and
conduct the businesses in which it is engaged; each of the U. S.
subsidiaries of the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation; is duly qualified to do business and is in
good standing as a foreign corporation in each jurisdiction in which its
ownership or leasing of property or the conduct of its business requires
such qualification (except where non-qualification would not have a
Material Adverse Effect) and has all corporate power and authority
necessary to own or hold its properties and conduct the business in which
it is engaged;
(ii) The Company has capital stock authorized and outstanding as set
forth in the Prospectus under the captions "Capitalization" and
"Description of Capital Stock," and all of the issued and outstanding
shares of capital stock of the Company (including the Stock delivered on
the date of such opinion when issued in accordance with the terms of the
Underwriting Agreement) have been duly authorized and validly issued, are
fully paid and non-assessable and conform, in all material respects, to the
description thereof contained in the Prospectus; the certificates for the
Stock are in due and proper form under Delaware law; and all of the issued
and outstanding shares of capital stock of each U. S. subsidiary of the
Company have been duly authorized and validly issued and are fully paid and
non-assessable and are owned of record, and to the best of such counsel's
knowledge beneficially, directly or indirectly by the Company, to the best
of such counsel's knowledge free and clear of all liens, encumbrances,
equities or claims;
(iii) 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
Common Stock pursuant to the Company's charter or by-laws or any agreement
or other instrument known to such counsel;
(iv) To the best of such counsel's knowledge and other than as set
forth in the Prospectus, there are no legal or governmental proceedings
pending or threatened against the Company which are required to be
disclosed in the Prospectus;
(v) The Registration Statement, including any Rule 462(b) Registration
Statement, was declared effective under the Securities Act as of the date
and time
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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 no stop order
suspending the effectiveness of the Registration Statement has been issued
and, to the knowledge of such counsel, 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 (other than the financial statements and related
schedules and notes therein and other financial and statistical data, 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, and when they were filed with the Commission complied as
to form in all material respects with the requirements of the Securities
Act and the Rules and Regulations (other than the financial statements and
related schedules and notes therein and other financial and statistical
data, as to which such counsel need express no opinion);
(vii) The statements under the captions "Description of Capital
Stock" and "Shares Eligible For Future Sale" in the Prospectus, insofar as
such statements constitute a summary of documents referred to therein or
matters of law, are accurate summaries in all material respects and fairly
and correctly present the information called for with respect to such
documents and matters;
(viii) 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;
(ix) This Agreement and the International Underwriting Agreement
have been duly authorized, executed and delivered by the Company;
(x) The issue and sale of the Stock being delivered on the date of
such opinion by the Company and the performance by the Company of its
obligations under this Agreement and the International Underwriting
Agreement and the consummation of the transactions contemplated hereby and
thereby do not conflict with or result in a material breach or violation of
any of the terms or provisions of, or constitute a material 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, 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 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 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,
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authorizations, registrations or qualifications as may be required under
the Exchange Act, the rules and regulations of the NASD, and applicable
state or foreign securities laws in connection with the purchase and
distribution of the Stock by the U.S. Underwriters and International
Managers, 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 or
the International Underwriting Agreement by the Company and the
consummation of the transactions contemplated hereby and thereby; and
(xi) To the best of such counsel's knowledge, 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.
Such counsel shall also have furnished to the Lead Managers a written
statement, addressed to the U.S. Underwriters and the International
Managers and dated as of the applicable Closing Date to the effect that (x)
such counsel has acted as counsel to the Company in connection with the
preparation of the Registration Statement and in connection therewith has
participated in conferences with officers and other representatives of the
Company, and representatives of the independent public accountants for the
Company, at which conferences the contents of the Registration Statement
and the Prospectus and related matters were discussed, 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 or Prospectus, 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 any 462(b)
Registration Statement or the Prospectus, as of its date and as of a
Delivery Date, 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 (provided that such counsel need express no
view with respect to the financial statements and the related schedules and
notes and other financial or statistical data included therein). 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, any 462(b) Registration Statement or the Prospectus
except for the statements made in the Prospectus under the captions
"Description of Capital Stock" and "Shares Eligible For Future Sale"
insofar as such statements relate to the Stock and concern legal matters.
-29-
ANNEX B
-------
Matters to be Covered in Opinion of Patent Counsel to the Company
-----------------------------------------------------------------
(i) Schedules I and II to such opinion identify, as of
[applicable Closing Date], all U.S. patents and U.S. patent applications
known to such counsel and filed by the Company in which the Company
currently has an interest. As of [recent specified date], the Company was
listed in the records of the U.S. Patent and Trademark Office (the "PTO")
as a holder of record of each of the patents and patent applications listed
in Schedule I. The patent rights to the patents and patent applications
listed in Schedule I, to the best of such counsel's knowledge, have been
assigned to the Company. Based on a search of the documents of record in
the PTO as of [recent specified date], a review of the Company records
through that date, and a review of the certificate of an officer of the
Company, such counsel has no knowledge of any facts which would preclude
the Company from having clear title to the patents and patent applications
listed in Schedule I. As of [recent specified date], the Company was a
licensee of each of the patents and patent applications listed in Schedule
II. The patent rights to the patents and patent applications listed in
Schedule II, to the best of such counsel's knowledge, have been assigned to
the licensor of each such patent or patent application. Based on a search
of the documents of record in the PTO as of [recent specified date], such
counsel has no knowledge of any facts which would preclude the Company from
having valid license rights under the patents and patent applications
listed in Schedule II.
(ii) To the best of such counsel's knowledge, none of the claims
of the patents set forth in Schedules I and II is invalid or unenforceable.
Each of the applications set forth in Schedule[s] I [and II] is pending in
the PTO, and such counsel is unaware of any defects in the prosecution of
any such application that would irrevocably foreclose the grant of patent
rights thereunder.
(iii) To the best of such counsel's knowledge, other than the
actions pending in the United States District Court between the Company and
EG&G (the "EG&G Action") and between the Company and AS&E (the "AS&E
Action"), there is no pending or threatened action, suit, proceeding, or
claim by others that the Company is infringing any patent.
(iv) To the best of such counsel's knowledge, other than review
of pending patent applications and the EG&G Action, there are no legal or
governmental proceedings pending relating to the patents or applications
set forth in Schedules I and II, other than review of pending applications
for patent, including appeal proceedings, and to the best of such counsel's
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or others.
(v) To the best of such counsel's knowledge, other than the EG&G
Action, there is no pending action, suit, proceeding or claim by others
challenging the validity or enforceability of any claim of the patents set
forth in Schedules I and II. To
-30-
the best of such counsel's knowledge, there is no interference proceeding
or public use proceeding with respect to any patent or patent application
set forth in Schedules I or II.
(vi) Based on a review of material including U.S. Patent No.
4,366,382 and the Company's automated inspection systems as they have been
and are currently made, no valid claim of U.S. Patent No. 4,366,382 is
infringed by such systems.
(vii) Based on a review of material including U.S. Patent Nos.
4,482,957; 4,511,799; 4,768,214; 4,799,247; 4,825,454; 4,893,015;
5,253,283; and 5,313,511 and the Company's automated inspection systems as
they have been and are made, no valid claim of such patents is infringed by
such systems.
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