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Exhibit 1.1
MERCURY COMPUTER SYSTEMS, INC.
3,500,000 Shares(1)
Common Stock
UNDERWRITING AGREEMENT
PRUDENTIAL SECURITIES INCORPORATED
XXXXX & COMPANY
As Representatives of the several Underwriters
c/o Prudential Securities Incorporated
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Mercury Computer Systems, Inc., a Massachusetts corporation (the
"Company"), each of the selling stockholders of the Company named in SCHEDULE I
hereto (the "Principal Selling Stockholders") and each of the selling
stockholders of the Company named in SCHEDULE II hereto (the "Additional Selling
Stockholders") (the Principal Selling Stockholders and the Additional Selling
Stockholders being referred to herein collectively as the "Selling
Stockholders") severally confirm their respective agreements with the several
underwriters named in SCHEDULE III hereto (the "Underwriters"), for whom you
have been duly authorized to act as representatives (in such capacities, the
"Representatives"), as set forth below. If you are the only Underwriters, all
references herein to the Representatives shall be deemed to be to the
Underwriters.
1. SECURITIES. Subject to the terms and conditions herein contained,
the Company proposes to issue and sell, and the Selling Stockholders propose to
sell, severally, to the several Underwriters an aggregate of 2,000,000 shares
and 1,500,000 shares, respectively (the "Firm Securities") of the Company's
Common Stock, par value $.01 per share ("Common Stock"). The Selling
Stockholders propose to sell, severally, to the several Underwriters not more
than 294,350 additional shares of Common Stock, in the aggregate, if requested
by the Representatives as provided in Section 3 of this Agreement, in the
respective amounts set forth opposite the names of the Selling Stockholders in
Column (b) of SCHEDULE I and SCHEDULE II hereto, as the case may be. The Company
proposes to sell to the several Underwriters not more than 230,650 additional
shares of Common Stock if requested by the Representatives and if the
Representatives have already exercised in full their options with respect to the
shares identified in the previous sentence, all as provided in Section 3 of this
Agreement. Any and all shares of Common Stock to be purchased by the
Underwriters pursuant to such options are referred to herein as the "Option
Securities", and the Firm Securities and any Option Securities are collectively
referred to herein as the "Securities".
2(A). REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to, and agrees with, each of the
several Underwriters that:
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(1) Plus options to purchase (i) from the Selling Stockholders up to
294,350 additional shares to cover over-allotments and (ii) from the
Company up to 230,650 additional shares to cover over-allotments.
The options shall be exercised FIRST with respect to the shares
subject to such options offered by the Selling Stockholders on a PRO
RATA basis until all of the 294,350 shares have been exercised and
SECOND with respect to the shares subject to such options offered by
the Company.
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(a) A registration statement on Form S-1 (File No. 333-41139) with
respect to the Securities, including a prospectus subject to completion, has
been filed by the Company with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"), and one
or more amendments to such registration statement may have been so filed. After
the execution of this Agreement, the Company will file with the Commission
either (i) if such registration statement, as it may have been amended, has been
declared by the Commission to be effective under the Act, either (A) if the
Company relies on Rule 434 under the Act, a Term Sheet (as hereinafter defined)
relating to the Securities, that shall identify the Preliminary Prospectus (as
hereinafter defined) that it supplements containing such information as is
required or permitted by Rules 434, 430A and 424(b) under the Act or (B) if the
Company does not rely on Rule 434 under the Act, a prospectus in the form most
recently included in an amendment to such registration statement (or, if no such
amendment shall have been filed, in such registration statement), with such
changes or insertions as are required by Rule 430A under the Act or permitted by
Rule 424(b) under the Act, and in the case of either clause (i)(A) or (i)(B) of
this sentence as have been provided to and approved by the Representatives prior
to the execution of this Agreement, or (ii) if such registration statement, as
it may have been amended, has not been declared by the Commission to be
effective under the Act, an amendment to such registration statement, including
a form of prospectus, a copy of which amendment has been furnished to and
approved by the Representatives prior to the execution of this Agreement. The
Company may also file a related registration statement with the Commission
pursuant to Rule 462(b) under the Act for the purpose of registering certain
additional Securities, which registration shall be effective upon filing with
the Commission. As used in this Agreement, the term "Original Registration
Statement" means the registration statement initially filed relating to the
Securities, as amended at the time when it was or is declared effective,
including all financial schedules and exhibits thereto and including any
information omitted therefrom pursuant to Rule 430A under the Act and included
in the Prospectus (as hereinafter defined); the term "Rule 462(b) Registration
Statement" means any registration statement filed with the Commission pursuant
to Rule 462(b) under the Act (including the Registration Statement and any
Preliminary Prospectus or Prospectus incorporated therein at the time such
Registration Statement becomes effective); the term "Registration Statement"
includes both the Original Registration Statement and any Rule 462(b)
Registration Statement; the term "Preliminary Prospectus" means each prospectus
subject to completion filed with such registration statement or any amendment
thereto (including the prospectus subject to completion, if any, included in the
Registration Statement or any amendment thereto at the time it was or is
declared effective); the term "Prospectus" means:
(A) if the Company relies on Rule 434 under the Act, the Term Sheet
relating to the Securities that is first filed pursuant to Rule
424(b)(7) under the Act, together with the Preliminary Prospectus
identified therein that such Term Sheet supplements;
(B) if the Company does not rely on Rule 434 under the Act, the
prospectus first filed with the Commission pursuant to Rule 424(b)
under the Act; or
(C) if the Company does not rely on Rule 434 under the Act and if
no prospectus is required to be filed pursuant to Rule 424(b) under
the Act, the prospectus included in the Registration Statement;
and the term "Term Sheet" means any term sheet that satisfies the requirements
of Rule 434 under the Act. Any reference herein to the "date" of a Prospectus
that includes a Term Sheet shall mean the date of such Term Sheet.
(b) The Commission has not issued any order preventing or suspending
use of any Preliminary Prospectus. When any Preliminary Prospectus was filed
with the Commission it (i) contained all statements required to be stated
therein in accordance with, and complied in all material respects with the
requirements of, the Act and the rules and regulations of the Commission
thereunder and (ii) did not include any 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, not
misleading. When the Registration Statement or any amendment thereto was or is
declared effective, it (i) contained or will contain all statements required to
be stated therein in accordance with, and complied or will comply in all
material respects with the requirements of, the Act and the rules and
regulations of the Commission thereunder and (ii) did not or will not include
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading. When the Prospectus or
any Term Sheet that is a part thereof or any amendment or supplement to the
Prospectus is filed with the Commission pursuant to Rule 424(b) (or, if the
Prospectus or part thereof or such amendment or supplement is not required to be
so filed, when the Registration Statement or the amendment thereto containing
such amendment or supplement to the Prospectus was or is declared effective) and
on the Firm Closing Date and any Option Closing Date (both as hereinafter
defined), the Prospectus, as amended or supplemented at any such time, (i)
contained or will contain all statements required to be stated therein in
accordance with, and complied or will comply in all material respects with the
requirements of, the Act and the rules
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and regulations of the Commission thereunder and (ii) did not or will not
include any 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, not misleading. The foregoing
provisions of this paragraph (b) do not apply to statements or omissions made in
any Preliminary Prospectus, the Registration Statement or any amendment thereto
or the Prospectus or any amendment or supplement thereto in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
through the Representatives specifically for use therein.
(c) If the Company has elected to rely on Rule 462(b) and the Rule
462(b) Registration Statement has not been declared effective (i) the Company
has filed a Rule 462(b) Registration Statement in compliance with, and that is
effective upon filing pursuant to, Rule 462(b) and has received confirmation of
its receipt and (ii) the Company has given irrevocable instructions for
transmission of the applicable filing fee in connection with the filing of the
Rule 462(b) Registration Statement, in compliance with Rule 111 promulgated
under the Act or the Commission has received payment of such filing fee.
(d) The Company has no subsidiaries other than those listed in
SCHEDULE IV hereto. The Company and each of its subsidiaries have been duly
organized and are validly existing as corporations in good standing under the
laws of their respective jurisdictions of incorporation and are duly qualified
to transact business as foreign corporations and are in good standing under the
laws of all other jurisdictions where the ownership or leasing of their
respective properties or the conduct of their respective businesses requires
such qualification, except where the failure to be so qualified would not have a
material adverse effect on the Company and its subsidiaries, taken as a whole.
(e) The Company and each of its subsidiaries have full power
(corporate or limited liability company) to own or lease their respective
properties and conduct their respective businesses as described in the
Registration Statement and the Prospectus or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus; and the Company has full
corporate or limited liability company power to enter into this Agreement and to
carry out all the terms and provisions hereof to be carried out by it.
(f) The issued shares of capital stock of each of the Company's
subsidiaries have been duly authorized and validly issued, are fully paid and
nonassessable and, except as otherwise set forth in the Prospectus or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus, are
owned beneficially by the Company free and clear of any security interests,
liens, encumbrances, equities or claims.
(g) The Company's authorized, issued and outstanding capitalization
is set forth in the Prospectus or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus. All of the issued and outstanding shares of
capital stock of the Company have been duly authorized and validly issued and
are fully paid and nonassessable. The Firm Securities and the Option Securities
have been duly authorized and at the Firm Closing Date or the related Option
Closing Date (as the case may be), after payment therefor in accordance
herewith, will be validly issued, fully paid and nonassessable. No holders of
outstanding shares of capital stock of the Company are entitled as such to any
preemptive or other rights to subscribe for any of the Securities, and no holder
of securities of the Company has any right which has not been fully exercised or
waived to require the Company to register the offer or sale of any securities
owned by such holder under the Act in the public offering contemplated by this
Agreement.
(h) After giving effect to the amendment to the Company's Articles
of Organization described in the Prospectus, the capital stock of the Company
conforms to the description thereof contained in the Prospectus or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus.
(i) Except as disclosed in the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus), there are no
outstanding (A) securities or obligations of the Company or any of its
subsidiaries convertible into or exchangeable for any capital stock of the
Company or any such subsidiary, (B) warrants, rights or options to subscribe for
or purchase from the Company or any such subsidiary any such capital stock or
any such convertible or exchangeable securities or obligations, or (C)
obligations of the Company or any such subsidiary to issue any shares of capital
stock, any such convertible or exchangeable securities or obligations, or any
such warrants, rights or options.
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(j) The consolidated financial statements and schedules of the
Company and its consolidated subsidiaries included in the Registration Statement
and the Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) fairly present the financial position of the Company and
its consolidated subsidiaries and the results of operations and changes in
financial condition as of the dates and periods therein specified. Such
financial statements and schedules have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved (except as otherwise noted therein). The selected financial
data set forth under the caption "Selected Consolidated Financial Data" in the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) fairly present, on the basis stated in the Prospectus
(or such Preliminary Prospectus), the information included therein.
(k) Coopers & Xxxxxxx L.L.P., who have certified certain financial
statements of the Company and its consolidated subsidiaries and delivered their
report with respect to the audited consolidated financial statements and
schedules included in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus), are
independent public accountants as required by the Act and the applicable rules
and regulations thereunder.
(l) The execution and delivery of this Agreement have been duly
authorized by the Company, and this Agreement has been duly executed and
delivered by the Company, and is the valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms.
(m) No legal or governmental proceedings are pending to which the
Company or any of its subsidiaries is a party or to which the property of the
Company or any of its subsidiaries is subject that are required to be described
in the Registration Statement or the Prospectus and are not described therein
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus), and no such proceedings have been threatened against the Company or
any of its subsidiaries or with respect to any of their respective properties;
and no contract or other document is required to be described in the
Registration Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement that is not described therein (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus) or filed as required.
(n) The issuance, offering and sale of the Securities to the
Underwriters by the Company pursuant to this Agreement, the compliance by the
Company with the other provisions of this Agreement and the consummation of the
other transactions herein contemplated do not (i) require the consent, approval,
authorization, registration or qualification of or with any governmental
authority, except such as have been obtained, such as may be required under
state securities or blue sky laws and, if the registration statement filed with
respect to the Securities (as amended) is not effective under the Act as of the
time of execution hereof, such as may be required (and shall be obtained as
provided in this Agreement) under the Act, or (ii) conflict with or result in a
breach or violation of any of the terms and provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, lease 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 or any of their respective
properties are bound, or the charter documents or by-laws of the Company or any
of its subsidiaries, or any statute or any judgment, decree, order, rule or
regulation of any court or other governmental authority or any arbitrator
applicable to the Company or any of its subsidiaries.
(o) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus, neither the Company
nor any of its subsidiaries has sustained any material loss or interference with
their respective businesses or properties from fire, flood, hurricane, accident
or other calamity, whether or not covered by insurance, or from any labor
dispute or any legal or governmental proceeding and there has not been any
material adverse change, or any development involving a prospective material
adverse change, in the condition (financial or otherwise), management, business
prospects, net worth, or results of the operations of the Company or any of its
subsidiaries, except in each case as described in or contemplated by the
Prospectus or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus.
(p) The Company has not, directly or indirectly, (i) taken any
action designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Securities or (ii) since the filing of the Registration Statement (A) sold, bid
for, purchased, or paid anyone any compensation for soliciting purchases of, the
Securities or (B) paid or agreed to pay to any person any compensation for
soliciting another to purchase any other securities of the Company (except for
the sale of Securities by the Selling Stockholders under this Agreement).
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(q) The Company has not distributed and, prior to the later of (i)
the Closing Date and (ii) the completion of the distribution of the Securities,
will not distribute any offering material in connection with the offering and
sale of the Securities other than the Registration Statement or any amendment
thereto, any Preliminary Prospectus or the Prospectus or any amendment or
supplement thereto, or other materials, if any permitted by the Act.
(r) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus), (1) the Company and
its subsidiaries have not incurred any material liability or obligation, direct
or contingent, nor entered into any material transaction not in the ordinary
course of business; (2) the Company has not purchased any of its outstanding
capital stock, nor declared, paid or otherwise made any dividend or distribution
of any kind on its capital stock; and (3) there has not been any material change
in the capital stock, short-term debt or long-term debt of the Company and its
consolidated subsidiaries, except in each case as described in or contemplated
by the Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(s) The Company and each of its subsidiaries have good and
marketable title in fee simple to all items of real property and marketable
title to all personal property owned by each of them, in each case free and
clear of any security interests, liens, encumbrances, equities, claims and other
defects, except such as do not materially and adversely affect the value of such
property and do not interfere with the use made of such property by the Company
or such subsidiary, and any real property and buildings held under lease by the
Company or any such subsidiary are held under valid, subsisting and enforceable
leases, with such exceptions as are not material and do not interfere with the
use made of such property and buildings by the Company or such subsidiary, in
each case except as described in or contemplated by the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus).
(t) No labor dispute with the employees of the Company or any of its
subsidiaries exists or is threatened that could result in a material adverse
change in the condition (financial or otherwise), business prospects, net worth
or results of operations of the Company and its subsidiaries, except as
described in or contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
(u) The Company and its subsidiaries own or possess, or can acquire
on reasonable terms, all material patents, patent applications, trademarks,
service marks, trade names, licenses, copyrights and proprietary or other
confidential information currently employed by them in connection with their
respective businesses, and neither the Company nor any such subsidiary has
received any notice of infringement of or conflict with asserted rights of any
third party with respect to any of the foregoing which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would
result in a material adverse change in the condition (financial or otherwise),
business prospects, net worth or results of operations of the Company and its
subsidiaries, except as described in or contemplated by the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary Prospectus).
(v) The Company and each of its subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which they are
engaged.
(w) No subsidiary of the Company is currently prohibited, directly
or indirectly, from paying any dividends to the Company, from making any other
distribution on such subsidiary's capital stock, from repaying to the Company
any loans or advances to such subsidiary from the Company or from transferring
any of such subsidiary's property or assets to the Company or any other
subsidiary of the Company, except as described in or contemplated by the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(x) The Company and its subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state or foreign
regulatory authorities necessary to conduct their respective businesses (except
those the nonpossession of which would not have a material adverse effect on the
business, operations or condition (financial or otherwise) of the Company and
its subsidiaries, taken as a whole), and neither the Company nor any such
subsidiary has received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit which, singly or
in the aggregate, if the subject of an unfavorable decision, ruling or finding,
would result in a material adverse change in the condition (financial or
otherwise), business prospects, net worth or results of operations of the
Company and its subsidiaries, taken as a whole, except as described in or
contemplated by the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus).
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(y) The Company has filed all foreign, federal, state and local tax
returns that are required to be filed or has requested extensions thereof
(except in any case in which the failure so to file would not have a material
adverse effect on the Company and its subsidiaries) and has paid all taxes
required to be paid by it and any other assessment, fine or penalty levied
against it, to the extent that any of the foregoing is due and payable, except
for any such assessment, fine or penalty that is currently being contested in
good faith or as described in or contemplated by the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus).
(z) Neither the Company nor any of its subsidiaries is in violation
of any federal or state law or regulation relating to occupational safety and
health or to the storage, handling or transportation of hazardous or toxic
materials and the Company and its subsidiaries have received all permits,
licenses or other approvals required of them under applicable federal and state
occupational safety and health and environmental laws and regulations to conduct
their respective businesses, and the Company and each such subsidiary is in
compliance with all terms and conditions of any such permit, license or
approval, except any such violation of law or regulation, failure to receive
required permits, licenses or other approvals or failure to comply with the
terms and conditions of such permits, licenses or approvals which would not,
singly or in the aggregate, result in a material adverse change in the condition
(financial or otherwise), business prospects, net worth or results of operations
of the Company and its subsidiaries, taken as a whole, except as described in or
contemplated by the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus).
(aa) Each certificate signed by any officer of the Company and
delivered to the Representatives or counsel for the Underwriters shall be deemed
to be a representation and warranty by the Company to each Underwriter as to the
matters covered thereby.
(bb) Except for the shares of capital stock of each of the
subsidiaries owned by the Company and such subsidiaries, neither the Company nor
any such subsidiary owns any shares of stock or any other equity securities of
any corporation or has any equity interest in any firm, partnership, association
or other entity, except as described in or contemplated by the Prospectus (or,
if the Prospectus is not in existence, the most recent Preliminary Prospectus).
(cc) The Company and each of its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance that (1)
transactions are executed in accordance with management's general or specific
authorizations; (2) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted accounting
principles and to maintain asset accountability; (3) access to assets is
permitted only in accordance with management's general or specific
authorization; and (4) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(dd) The Company has complied with, and is and will be in compliance
with, the provisions of that certain Florida act relating to disclosure of doing
business with Cuba, codified as Section 517.075 of the Florida statutes, and the
rules and regulations thereunder or is exempt therefrom.
(ee) The Company is not, and upon the issuance and sale of the
Securities as herein contemplated and the application of the net proceeds
therefrom as described in the Prospectus will not be, an "investment company" or
an entity "controlled" by an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended.
(ff) No default exists, and no event has occurred which, with notice
or lapse of time or both, would constitute a default in the due performance and
observance of any term, covenant or condition of any indenture, mortgage, deed
of trust, lease 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
or any of their respective properties is bound or may be affected in any
material adverse respect with regard to property, business or operations of the
Company and its subsidiaries, taken as a whole.
2(B). REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS.
Each Selling Stockholder represents and warrants to, and agrees with, each of
the several Underwriters, severally and not jointly, that:
(a) Such Selling Stockholder has full power to enter into this
Agreement and to sell, assign, transfer and deliver to the Underwriters the
Securities to be sold by such Selling Stockholder hereunder in accordance with
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the terms of this Agreement; and this Agreement has been duly executed and
delivered by such Selling Stockholder, and is the valid and binding agreement of
such Selling Stockholder, enforceable against each such Selling Stockholder in
accordance with its terms.
(b) Such Selling Stockholder has duly executed and delivered a power
of attorney and custody agreement (with respect to such Selling Stockholder, the
"Power-of-Attorney" and the "Custody Agreement", respectively), each in the form
heretofore delivered to the Representatives, appointing Xxxxx X. Xxxxxxxx and X.
Xxxxxx Xxxxxx as such Selling Stockholder's attorney-in-fact (the
"Attorney-in-Fact") with authority to execute, deliver and perform this
Agreement on behalf of such Selling Stockholder and appointing Xxxxxxxx, Xxxxxxx
& Xxxxxxx, A Professional Corporation, as custodian thereunder (the
"Custodian"). Certificates in negotiable form, endorsed in blank or accompanied
by blank stock powers duly executed, with signatures appropriately guaranteed,
representing the Securities to be sold by such Selling Stockholder hereunder
have been deposited with the Custodian pursuant to the Custody Agreement for the
purpose of delivery pursuant to this Agreement. Such Selling Stockholder has
full power to enter into the Custody Agreement and the Power-of-Attorney and to
perform its obligations under the Custody Agreement. If such Selling Stockholder
is a corporation, the execution and delivery of the Custody Agreement and the
Power-of-Attorney have been duly authorized by all necessary corporate action of
such Selling Stockholder; the Custody Agreement and the Power-of-Attorney have
been duly executed and delivered by such Selling Stockholder and, assuming due
authorization, execution and delivery by the Custodian, are the legal, valid,
binding and enforceable instruments of such Selling Stockholder. Such Selling
Stockholder agrees that each of the Securities represented by the certificates
on deposit with the Custodian is subject to the interests of the Underwriters
hereunder, that the arrangements made for such custody, the appointment of the
Attorney-in-Fact and the right, power and authority of the Attorney-in-Fact to
execute and deliver this Agreement, to agree on the price at which the
Securities (including such Selling Stockholder's Securities) are to be sold to
the Underwriters, and to carry out the terms of this Agreement, are to that
extent irrevocable and that the obligations of such Selling Stockholder
hereunder shall not be terminated, except as provided in this Agreement or the
Custody Agreement, by any act of such Selling Stockholder, by operation of law
or otherwise, whether in the case of any individual Selling Stockholder by the
death or incapacity of such Selling Stockholder, in the case of a trust or
estate by the death of the trustee or trustees or the executor or executors or
the termination of such trust or estate, or in the case of a corporate or
partnership Selling Stockholder by its liquidation or dissolution or by the
occurrence of any other event. If any individual Selling Stockholder, trustee or
executor should die or become incapacitated or any such trust should be
terminated, or if any corporate or partnership Selling Stockholder shall
liquidate or dissolve, or if any other event should occur, before the delivery
of such Securities hereunder, the certificates for such Securities deposited
with the Custodian shall be delivered by the Custodian in accordance with the
respective terms and conditions of this Agreement as if such death, incapacity,
termination, liquidation or dissolution or other event had not occurred,
regardless of whether or not the Custodian or the Attorney-in-Fact shall have
received notice thereof.
(c) Such Selling Stockholder is the lawful owner of the Securities
to be sold by such Selling Stockholder hereunder and upon sale and delivery of,
and payment for, such Securities, as provided herein, such Selling Stockholder
will convey good and marketable title to such Securities, free and clear of any
security interests, liens, encumbrances, equities, claims or other defects. Such
Selling Stockholder has obtained all authorizations and approvals required by
law and under its charter or bylaws, partnership agreement, trust agreement or
other organizational documents, as the case may be, to enter this Agreement,
such Selling Stockholder's Power of Attorney and Custody Agreement, to sell,
transfer and deliver all of the shares of Common Stock which may be sold by such
Selling stockholder pursuant to this Agreement; and to comply with other
obligations hereunder and thereunder.
(d) Such Selling Stockholder has not, directly or indirectly, (i)
taken any action designed to cause or result in, or that has constituted or
which might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Securities or (ii) since the filing of the Registration
Statement (A) sold, bid for, purchased, or paid anyone any compensation for
soliciting purchases of, the Securities or (B) paid or agreed to pay to any
person any compensation for soliciting another to purchase any other securities
of the Company (except for the sale of Securities by the Selling Stockholders
under this Agreement).
(e) To the extent that any statements or omissions are made in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto in reliance upon and in conformity with written
information furnished to the Company by such Selling Stockholder specifically
for use therein, such Preliminary Prospectus did, and the Registration Statement
and the Prospectus and any amendments or supplements
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thereto, 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
Act and the respective rules and regulations of the Commission thereunder and
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they are made, not
misleading. Such Selling Stockholder has reviewed the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus) and the
Registration Statement, and the information regarding such Selling Stockholder
set forth therein under the caption "Principal and Selling Stockholders" is
complete and accurate.
(f) The sale by such Selling Stockholder of Securities pursuant
hereto is not prompted by any adverse information known to such Selling
Stockholder concerning the Company that is not set forth in the Registration
Statement or the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus).
(g) The sale of the Securities to the Underwriters by such Selling
Stockholder pursuant to this Agreement, the compliance by such Selling
Stockholder with the other provisions of this Agreement, the Power of Attorney,
the Custody Agreement and the consummation of the other transactions herein
contemplated do not (i) require the consent, approval, authorization,
registration or qualification of or with any governmental authority, except such
as have been obtained, such as may be required under state securities or blue
sky laws and, if the registration statement filed with respect to the Securities
(as amended) is not effective under the Act as of the time of execution hereof,
such as may be required (and shall be obtained as provided in this Agreement)
under the Act, or (ii) conflict with or result in a breach or violation of any
of the terms and provisions of, or constitute a default under any indenture,
mortgage, deed of trust, lease or other agreement or instrument to which such
Selling Stockholder or, if applicable, to which such Selling Stockholder or any
of its subsidiaries is a party or by which such Selling Stockholder or, if
applicable, by which such Selling Stockholder or any of its subsidiaries or any
of such Selling Stockholder's properties are bound, or the charter documents or
by-laws of such Selling Stockholder or any statute or any judgment, decree,
order, rule or regulation of any court or other governmental authority or any
arbitrator applicable to such Selling Stockholder or, if applicable, to such
Selling Stockholder or any of its subsidiaries.
(h) Each certificate signed by such Selling Stockholder or any
officer of such Selling Stockholder and delivered to the Representatives or
counsel for the Underwriters shall be deemed to be a representation and warranty
by such Selling Stockholder to each Underwriter as to the matters covered
thereby.
2(C). ADDITIONAL REPRESENTATIONS AND WARRANTIES OF THE PRINCIPAL
SELLING STOCKHOLDERS. Each Principal Selling Stockholder represents and warrants
to, and agrees with, each of the several Underwriters, severally and not
jointly, that nothing has come to the attention of such Principal Selling
Stockholder that would cause such Principal Selling Stockholder to believe that:
(a) any of the Company's representations and warranties set forth in
Section 2(A) hereof was untrue as of the date any such representation or
warranty was made; or
(b) (1) when any Preliminary Prospectus was filed with the
Commission it (i) did not contain all statements required to be stated therein
in accordance with, or did not comply in all material respects with the
requirements of, the Act and the rules and regulations of the Commission
thereunder or (ii) included any untrue statement of a material fact or omitted
to state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
(2) when the Registration Statement or any amendment thereto was or
is declared effective, it (i) did not contain or will not contain all statements
required to be stated therein in accordance with, or did not comply or will not
comply in all material respects with the requirements of, the Act and the rules
and regulations of the Commission thereunder or (ii) included or will include
any untrue statement of a material fact or omitted or will omit to state any
material fact necessary to make the statements therein not misleading;
(3) when the Prospectus or any Term Sheet that is a part thereof or
any amendment or supplement to the Prospectus is filed with the Commission
pursuant to Rule 424(b) (or, if the Prospectus or part thereof or such amendment
or supplement is not required to be so filed, when the Registration Statement or
the amendment thereto containing such amendment or supplement to the Prospectus
was or is declared effective) and on the Firm Closing Date and any Option
Closing Date, the Prospectus, as amended or supplemented at any such time, (i)
did not or will not contain all statements required to be stated therein in
accordance with, or did not or will not comply in all material
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respects with the requirements of, the Act and the rules and regulations of the
Commission thereunder or (ii) included or will include any untrue statement of a
material fact or omitted or will 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, not misleading;
unless, in the case of (b) above, any such statements or omissions made in any
Preliminary Prospectus, the Registration Statement or any amendment thereto or
the Prospectus or any amendment or supplement thereto were made in reliance upon
and in conformity with written information furnished to the Company or any
Principal Selling Stockholder by any Underwriter through the Representatives
specifically for use therein.
3. PURCHASE, SALE AND DELIVERY OF THE SECURITIES. (a) On the basis
of the representations, warranties, agreements and covenants herein contained
and subject to the terms and conditions herein set forth, (A) the Company agrees
to issue and sell to each of the Underwriters, severally and not jointly, and
each of the Underwriters, severally and not jointly, agrees to purchase from the
Company, at a purchase price of $9.765 per share, the number of Firm Securities
set forth opposite the name of such Underwriter in Column (a) of SCHEDULE III
hereto and (B) each of the Selling Stockholders, severally and not jointly,
agrees to sell to the Underwriters, severally and not jointly, the number of
Firm Securities set forth opposite the name of such Selling Stockholder in
Column (a) of SCHEDULE I or SCHEDULE II hereto, as the case may be, and each of
the Underwriters, severally and not jointly, agrees to purchase from the Selling
Stockholders, severally and not jointly, the number of Firm Securities set forth
opposite the name of such Underwriter in Column (b) of SCHEDULE III hereto. One
or more certificates in definitive form for the Firm Securities that the several
Underwriters have agreed to purchase hereunder, and in such denomination or
denominations and registered in such name or names as the Representatives
request upon notice to the Company at least 48 hours prior to the Firm Closing
Date, shall be delivered by or on behalf of the Company and the Selling
Stockholders to the Representatives for the respective accounts of the
Underwriters, against payment by or on behalf of the Underwriters of the
purchase price therefor by wire transfer in same-day funds (the "Wired Funds")
to the respective accounts of the Company and the Selling Stockholders. Such
delivery of and payment for the Firm Securities shall be made at the offices of
Xxxxxxxx, Xxxxxxx & Xxxxxxx, A Professional Corporation, 000 Xxxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000 at 9:30 A.M., New York time, on February 4, 1998, or
at such other place, time or date as the Representatives, the Company and the
Selling Stockholders may agree upon or as the Representatives may determine
pursuant to Section 9 hereof, such time and date of delivery against payment
being herein referred to as the "Firm Closing Date". The Company and the Selling
Stockholders will make such certificate or certificates for the Firm Securities
available for checking and packaging by the Representatives at the offices in
New York, New York of the Company's transfer agent or registrar or of Prudential
Securities Incorporated at least 24 hours prior to the Firm Closing Date.
(b) For the purpose of covering any over-allotments in connection
with the distribution and sale of the Firm Securities as contemplated by the
Prospectus, the Company and each Selling Stockholder, severally and not jointly,
hereby grant to the several Underwriters options to purchase, severally and not
jointly, the number of Option Securities set forth opposite the name of such
Underwriter in Column (c) of SCHEDULE III hereto with respect to the Selling
Stockholders and in Column (d) of SCHEDULE III hereto with respect to the
Company. The options granted hereby (i) shall be exercised FIRST as to the
shares subject to such options which are offered by the Selling Stockholders as
set forth opposite the name of such Selling Stockholder in Column (b) of
SCHEDULE I or SCHEDULE II hereto, as the case may be, PRO RATA among the Selling
Stockholders based upon the percentage obtained for each Selling Stockholder by
computing a fraction the numerator of which is the number of shares so offered
by a Selling Stockholder as set forth opposite the name of such Selling
Stockholder in Column (b) of SCHEDULE I or SCHEDULE II hereto, as the case may
be, and the denominator of which is the total number of shares so offered by all
Selling Stockholders (calculated by figuring the sum of the "total" rows of
Column (b) in each of SCHEDULE I and SCHEDULE II hereto) and SECOND as to the
shares subject to such options which are offered by the Company and (ii) subject
to the preceding clause (i), may be exercised as to all or any part of the
Option Securities from time to time within thirty days after the date of the
Prospectus (or, if such 30th day shall be a Saturday or Sunday or a holiday, on
the next business day thereafter when the New York Stock Exchange is open for
trading). The Underwriters shall not be under any obligation to purchase any of
the Option Securities prior to the exercise of such options. The Representatives
may from time to time exercise the options granted hereby by giving notice in
writing or by telephone (confirmed in writing) to the Selling Stockholder from
whom such option is being exercised (and the Attorneys-in-Fact) and/or the
Company, as the case may be, setting forth the aggregate number of Option
Securities as to which the several Underwriters are then exercising such option
and the date and time for delivery of and payment for such Option Securities.
Any such date of delivery shall be determined by the Representatives but shall
not be earlier than two business days or later than five business days after
such exercise of such option and, in any event, shall not be earlier than the
Firm Closing Date. The time and date set forth in such notice, or such other
time on such other date as the Representatives and the Selling Stockholders (and
the Attorneys-in-Fact) and/or the Company, as the case may be, may agree upon or
as the Representatives may determine
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pursuant to Section 9 hereof, is herein called the "Option Closing Date" with
respect to such Option Securities. Upon exercise of such option as provided
herein, such Selling Stockholder and/or the Company, as the case may be, shall
become obligated to sell to each of the several Underwriters, and, subject to
the terms and conditions herein set forth, each of the Underwriters (severally
and not jointly) shall become obligated to purchase from such Selling
Stockholder and/or the Company, as the case may be, the number of Option
Securities set forth opposite the name of Underwriter in Column (c) of SCHEDULE
III hereto with respect to the Selling Stockholders and Column (d) of SCHEDULE
III hereto with respect to the Company, in the same percentage of the total
number of the Option Securities as to which the several Underwriters are then
exercising such option as such Underwriter is obligated to purchase of the
aggregate number of Firm Securities, as adjusted by the Representatives in such
manner as they deem advisable to avoid fractional shares. If such option is
exercised as to all or any portion of the Option Securities, one or more
certificates in definitive form for such Option Securities, and payment
therefor, shall be delivered on the related Option Closing Date in the manner,
and upon the terms and conditions, set forth in paragraph (a) of this Section 3,
except that reference therein to the Firm Securities and the Firm Closing Date
shall be deemed, for purposes of this paragraph (b), to refer to such Option
Securities and Option Closing Date, respectively.
(c) The Company and each Selling Stockholder hereby acknowledge that
the wire transfer by or on behalf of the Underwriters of the purchase price for
any Securities does not constitute closing of a purchase and sale of the
Securities. Only execution and delivery of a receipt for Securities by the
Underwriters indicates completion of the closing of a purchase of the Securities
from the Company or any Selling Stockholder. Furthermore, in the event that the
Underwriters wire funds to the Company or any Selling Stockholder prior to the
completion of the closing of a purchase of Securities, the Company and each
Selling Stockholder hereby acknowledge that until the Underwriters execute and
deliver a receipt for the Securities, by facsimile or otherwise, the Company and
each Selling Stockholder will not be entitled to the wired funds and shall
return the wired funds to the Underwriters as soon as practicable (by wire
transfer of same-day funds) upon demand. In the event that the closing of a
purchase of Securities is not completed and the wire funds are not returned by
the Company or any Selling Stockholder to the Underwriters on the same day the
wired funds were received by the Company or any Selling Stockholder, the Company
and each Selling Stockholder agrees to pay to the Underwriters in respect of
each day the wire funds are not returned by it, in same-day funds, interest on
the amount of such wire funds in an amount representing the Underwriters' cost
of financing as reasonably determined by Prudential Securities Incorporated.
(d) It is understood that any of you, individually and not as one of
the Representatives, may (but shall not be obligated to) make payment on behalf
of any Underwriter or Underwriters for any of the Securities to be purchased by
such Underwriter or Underwriters. No such payment shall relieve such Underwriter
or Underwriters from any of its or their obligations hereunder.
4. OFFERING BY THE UNDERWRITERS. Upon your authorization of the
release of the Firm Securities, the several Underwriters propose to offer the
Firm Securities for sale to the public upon the terms set forth in the
Prospectus.
5. COVENANTS OF THE COMPANY AND THE SELLING STOCKHOLDERS.
(A) The Company covenants and agrees with each of the
Underwriters that:
(a) The Company will use its best efforts to cause the Registration
Statement, if not effective at the time of execution of this Agreement, and any
amendments thereto, to become effective as promptly as possible. If required,
the Company will file the Prospectus or any Term Sheet that constitutes a part
thereof and any amendment or supplement thereto with the Commission in the
manner and within the time period required by Rules 434 and 424(b) under the
Act. During any time when a prospectus relating to the Securities is required to
be delivered under the Act, the Company (i) will comply with all requirements
imposed upon it by the Act and the rules and regulations of the Commission
thereunder to the extent necessary to permit the continuance of sales of or
dealings in the Securities in accordance with the provisions hereof and of the
Prospectus, as then amended or supplemented, and (ii) will not file with the
Commission the prospectus, Term Sheet or the amendment referred to in the second
sentence of Section 2(A)(a) hereof, any amendment or supplement to such
Prospectus, Term Sheet or any amendment to the Registration Statement or any
Rule 462(b) Registration Statement of which the Representatives previously have
been advised and furnished with a copy for a reasonable period of time prior to
the proposed filing and as to which filing the Representatives shall not have
given their consent. The Company will prepare and file with the Commission, in
accordance with the rules and regulations of the Commission, promptly upon
request by the Representatives or counsel for the Underwriters, any amendments
to the Registration Statement or amendments or supplements to the Prospectus
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that may be necessary or advisable in connection with the distribution of the
Securities by the several Underwriters, and will use its best efforts to cause
any such amendment to the Registration Statement to be declared effective by the
Commission as promptly as possible. The Company will advise the Representatives,
promptly after receiving notice thereof, of the time when the Registration
Statement or any amendment thereto has been filed or declared effective or the
Prospectus or any amendment or supplement thereto has been filed and will
provide evidence satisfactory to the Representatives of each such filing or
effectiveness.
(b) The Company will advise the Representatives, promptly after
receiving notice or obtaining knowledge thereof, of (i) the issuance by the
Commission of any stop order suspending the effectiveness of the Original
Registration Statement or any Rule 462(b) Registration Statement or any
amendment thereto or any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or any amendment or supplement thereto,
(ii) the suspension of the qualification of the Securities for offering or sale
in any jurisdiction, (iii) the institution, threatening or contemplation of any
proceeding for any such purpose or (iv) any request made by the Commission for
amending the Original Registration Statement or any Rule 462(b) Registration
Statement, for amending or supplementing the Prospectus or for additional
information. The Company will use its best efforts to prevent the issuance of
any such stop order and, if any such stop order is issued, to obtain the
withdrawal thereof as promptly as possible.
(c) The Company will arrange for the qualification of the Securities
for offering and sale under the securities or blue sky laws of such
jurisdictions as the Representatives may designate and will continue such
qualifications in effect for as long as may be necessary to complete the
distribution of the Securities; PROVIDED, HOWEVER, that in connection therewith,
the Company shall not be required to qualify as a foreign corporation or to
execute a general consent to service of process in any jurisdiction.
(d) If, at any time prior to the later of (i) the final date when a
prospectus relating to the Securities is required to be delivered under the Act
or (ii) the Option Closing Date, any event occurs as a result of which the
Prospectus, as then amended or supplemented, would include any untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, or if for any other reason it is necessary at any time to
amend or supplement the Prospectus to comply with the Act or the rules or
regulations of the Commission thereunder, the Company will promptly notify the
Representatives thereof and, subject to Section 5(a) hereof, will prepare and
file with the Commission, at the Company's expense, an amendment to the
Registration Statement or an amendment or supplement to the Prospectus that
corrects such statement or omission or effects such compliance.
(e) The Company will, without charge, provide (i) to the
Representatives and to counsel for the Underwriters a conformed copy of the
registration statement originally filed with respect to the Securities and each
amendment thereto (in each case including exhibits thereto) or any Rule 462(b)
Registration Statement, certified by the Secretary or an Assistant Secretary of
the Company to be true and complete copies thereof as filed with the Commission
by electronic transmission, (ii) to each other Underwriter, a conformed copy of
such registration statement or any Rule 462(b) Registration Statement and each
amendment thereto (in each case without exhibits thereto) and (iii) so long as a
prospectus relating to the Securities is required to be delivered under the Act,
as many copies of each Preliminary Prospectus or the Prospectus or any amendment
or supplement thereto as the Representatives may reasonably request; without
limiting the application of clause (iii) of this sentence, the Company, not
later than (A) 6:00 PM, New York City time, on the date of determination of the
public offering price, if such determination occurred at or prior to 10:00 A.M.,
New York City time, on such date or (B) 2:00 PM, New York City time, on the
business day following the date of determination of the public offering price,
if such determination occurred after 10:00 A.M., New York City time, on such
date, will deliver to the Underwriters, without charge, as many copies of the
Prospectus and any amendment or supplement thereto as the Representatives may
reasonably request for purposes of confirming orders that are expected to settle
on the Firm Closing Date.
(f) The Company, as soon as practicable, will make generally
available to its Stockholders and to the Representatives a consolidated earnings
statement of the Company and its subsidiaries that satisfies the provisions of
Section 11(a) of the Act and Rule 158 thereunder.
(g) The Company will apply the net proceeds from the sale of the
Securities as set forth under "Use of Proceeds" in the Prospectus.
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(h) The Company will not, directly or indirectly, without the prior
written consent of Prudential Securities Incorporated, on behalf of the
Underwriters, offer, sell, offer to sell, contract to sell, pledge, grant any
option to purchase or otherwise sell or dispose (or announce any offer, sale,
offer of sale, contract of sale, pledge, grant of any option to purchase or
other sale or disposition) of any shares of Common Stock or any securities
convertible into, or exchangeable or exercisable for, shares of Common Stock for
a period of 180 days after the date hereof, and except for issuances pursuant to
the exercise of employee stock options pursuant to the Company's stock option
plans and its employee stock purchase plan in effect as of the date hereof.
Prudential Securities Incorporated may, in its sole discretion, at any time and
without prior notice, release all or any portion of the shares of Common Stock
subject to such agreement.
(i) The Company will not, directly or indirectly, (i) take any
action designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Securities or (ii) (A) sell, bid for, purchase, or pay anyone any compensation
for soliciting purchases of, the Securities or (B) pay or agree to pay to any
person any compensation for soliciting another to purchase any other securities
of the Company (except for the sale of Securities by the Selling Stockholders
under this Agreement).
(j) The Company will use all commercially reasonable efforts to
obtain the agreements described in Section 7(g) hereof prior to the Firm Closing
Date.
(k) If at any time during the 25-day period after the Registration
Statement becomes effective or the period prior to the Option Closing Date, any
rumor, publication or event relating to or affecting the Company shall occur as
a result of which in your opinion the market price of the Common Stock has been
or is likely to be materially affected (regardless of whether such rumor,
publication or event necessitates a supplement to or amendment of the
Prospectus), the Company will, after notice from you advising the Company to the
effect set forth above and with our consent (which consent shall not be
unreasonably withheld or delayed), forthwith prepare, consult with you
concerning the substance of, and disseminate a press release or other public
statement, reasonably satisfactory to you, responding to or commenting on such
rumor, publication or event.
(l) If the Company elects to rely on Rule 462(b), the Company shall
both file a Rule 462(b) Registration Statement with the Commission in compliance
with Rule 462(b) and pay the applicable fees in accordance with Rule 111
promulgated under the Act by the earlier of (i) 10:00 P.M. Eastern time on the
date of this Agreement and (ii) the time confirmations are sent or given, as
specified by Rule 462(b)(2).
(m) The Company will cause the Securities to be duly included for
quotation on The Nasdaq Stock Market's National Market (the "Nasdaq National
Market") prior to the Firm Closing Date. The Company will use its best efforts
to ensure that the Securities remain included for quotation on the Nasdaq
National Market or are included for quotation on another national quotation
system or listed on a national securities exchange following the Firm Closing
Date.
(n) The Company will conduct its operations in a manner that will
not subject it to registration as an investment company under the Investment
Company Act of 1940, as amended, and this transaction will not cause the Company
to become an investment company subject to registration under such Act.
(B) Each of the Selling Stockholders covenants and agrees with
each of the Underwriters that:
(a) such Selling Stockholder will not, directly or indirectly,
without the prior written consent of Prudential Securities Incorporated, offer,
sell, offer to sell, contract to sell, pledge, grant any option to purchase or
otherwise sell or dispose (or announce any offer, sale, offer of sale, contract
of sale, pledge, grant of any option to purchase or other sale or disposition)
of any Securities legally or beneficially owned by such Selling Stockholder or
any securities convertible into, or exchangeable or exercisable for, Securities
for a period of 180 days after the date hereof. Prudential Securities
Incorporated may, in its sole discretion, at any time and without prior notice,
release all or any portion of the shares of Common Stock subject to such
agreements; PROVIDED, HOWEVER, that notwithstanding the foregoing restrictions
on transfer (collectively, the "Restrictions"), such Selling Stockholder shall
be permitted to make the following transfers: (i) transfers of shares of Common
Stock made by gift, provided the donee thereof agrees in writing to be bound by
the Restrictions; (ii) transfers of shares of Common Stock to members of such
Selling Stockholder's immediate family or to a trust or similar estate planning
entity established for the benefit of such Selling Stockholder or a member of
such Selling Stockholder's immediate family, provided that each transferee
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agrees in writing to be bound by the Restrictions; (iii) transfers of shares of
Common Stock to the transferor's affiliates, as such term is defined in Rule 405
under the Act, provided that each transferee agrees in writing to be bound by
the Restrictions; (iv) transfers of shares of Common Stock made with the prior
written consent of Prudential Securities Incorporated on behalf of the
Underwriters; and (v) transfers of shares of Common Stock pursuant to the
Registration Statement.
(b) such Selling Stockholder will not, directly or indirectly, (i)
take any action designed to cause or result in, or that has constituted or which
might reasonably be expected to constitute, the stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale of the
Securities or (ii) (A) sell, bid for, purchase, or pay anyone any compensation
for soliciting purchases of, the Securities or (B) pay or agree to pay to any
person any compensation for soliciting another to purchase any other securities
of the Company (except for the sale of Securities by the Selling Stockholders
under this Agreement).
(c) in order to document the Underwriters' compliance with the
reporting and withholding provisions of the Internal Revenue Code of 1986, as
amended, with respect to the transactions herein contemplated, such Selling
Stockholder agrees to deliver to you prior to or on the Firm Closing Date, as
hereinafter defined, a properly completed and executed United States Treasury
Department Form W-8 or W-9 (or other applicable form of statement specified by
Treasury Department regulations in lieu thereof).
6. EXPENSES. The Company will pay all costs and expenses incident to
the performance of the obligations of the Company and the Selling Stockholders
under this Agreement, whether or not the transactions contemplated herein are
consummated or this Agreement is terminated pursuant to Section 11 hereof,
including all costs and expenses incident to (i) the printing or other
production of documents with respect to the transactions, including any costs of
printing the registration statement originally filed with respect to the
Securities and any amendment thereto, any Rule 462(b) Registration Statement,
any Preliminary Prospectus and the Prospectus and any amendment or supplement
thereto, this Agreement and any blue sky memoranda, (ii) all arrangements
relating to the delivery to the Underwriters of copies of the foregoing
documents, (iii) the fees and disbursements of the counsel, the accountants and
any other experts or advisors retained by the Company and, in accordance with
applicable agreements, the Selling Stockholders, (iv) preparation, issuance and
delivery to the Underwriters of any certificates evidencing the Securities,
including transfer agent's and registrar's fees, (v) the qualification of the
Securities under state securities and blue sky laws, including filing fees and
fees and disbursements of counsel for the Underwriters relating thereto, (vi)
the filing fees of the Commission and the National Association of Securities
Dealers, Inc. relating to the Securities, including filing fees and fees and
disbursements of counsel for the Underwriters relating thereto, (vii) any
quotation of the Securities on the Nasdaq National Market, (viii) all expenses
of the Company's officers in connection with any meetings with prospective
investors in the Securities and (ix) advertising relating to the offering of the
Securities which has been specifically requested by the Company and not the
Underwriters. If the sale of the Securities provided for herein is not
consummated because any condition to the obligations of the Underwriters set
forth in Section 7 hereof is not satisfied, because this Agreement is terminated
pursuant to Section 11(a)(i) or (ii) hereof or because of any failure, refusal
or inability on the part of the Company to perform all obligations and satisfy
all conditions on its part to be performed or satisfied hereunder other than by
reason of a default by any of the Underwriters, the Company will reimburse the
Underwriters severally upon demand for all out-of-pocket expenses (including
counsel fees and disbursements) that shall have been incurred by them in
connection with the proposed purchase and sale of the Securities; PROVIDED,
HOWEVER, that if the Closing of the sale of the Firm Securities has been
consummated, reimbursement of expenses paid in accordance with this sentence
shall be payable to the Underwriters severally upon demand (i) for all
out-of-pocket expenses (including counsel fees and disbursements) that shall
have been incurred by them in connection with the proposed purchase and sale of
the Option Securities the sale of which has not been consummated for any of the
reasons provided in this sentence and (ii) only if all Underwriters' discounts
and commissions from the purchase and sale of the Firm Securities pursuant to
Section 3 hereof have been paid in full to the Underwriters. The Company shall
not in any event be liable to any of the Underwriters for the loss of
anticipated profits from the transactions covered by this Agreement.
Each Selling Stockholder will pay any transfer taxes attributable to
the sale by such Selling Stockholder of the Securities it sells hereunder.
7. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligations of
the several Underwriters to purchase and pay for the Firm Securities shall be
subject, in the Representatives' sole discretion, to the accuracy of the
representations and warranties of the Company and the Selling Stockholders
contained herein as of the date hereof and as of the Firm Closing Date, as if
made on and as of the Firm Closing Date, to the accuracy of the statements of
the
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Company's officers made pursuant to the provisions hereof, to the
performance by the Company and the Selling Stockholders of their respective
covenants and agreements hereunder and to the following additional conditions:
(a) If the Original Registration Statement or any amendment thereto
filed prior to the Firm Closing Date has not been declared effective as of the
time of execution hereof, the Original Registration Statement or such amendment
and, if the Company has elected to rely upon Rule 462(b), the Rule 462(b)
Registration Statement shall have been declared effective not later than the
earlier of (i) 11:00 A.M., New York time, on the date on which the amendment to
the registration statement originally filed with respect to the Securities or to
the Registration Statement, as the case may be, containing information regarding
the initial public offering price of the Securities has been filed with the
Commission and (ii) the time confirmations are sent or given as specified by
Rule 462(b)(2), or with respect to the Original Registration Statement, or such
later time and date as shall have been consented to by the Representatives; if
required, the Prospectus or any Term Sheet that constitutes a part thereof and
any amendment or supplement thereto shall have been filed with the Commission in
the manner and within the time period required by Rules 434 and 424(b) under the
Act; no stop order suspending the effectiveness of the Registration Statement or
any amendment thereto shall have been issued, and no proceedings for that
purpose shall have been instituted or threatened or, to the knowledge of the
Company, the Selling Stockholders or the Representatives, shall be contemplated
by the Commission; and the Company and each Selling Stockholder shall have
complied with any request of the Commission for additional information (to be
included in the Registration Statement or the Prospectus or otherwise).
(b)(1) The Representatives shall have received an opinion, dated the
Firm Closing Date, of Xxxxxxxx, Xxxxxxx & Xxxxxxx, A Professional Corporation,
counsel for the Company, to the effect that:
(i) the Company and each of its subsidiaries which is organized in
the United States (the "U.S. Subsidiaries") have been duly organized and are
validly existing as corporations in good standing under the laws of their
respective jurisdictions of incorporation;
(ii) the Company and each of the U.S. Subsidiaries have the
corporate power and authority to own or lease their respective properties and
conduct their respective businesses as described in the Registration Statement
and the Prospectus, and the Company has the corporate power and authority to
enter into this Agreement and to carry out all the terms and provisions hereof
to be carried out by it;
(iii) the issued shares of capital stock of each of the U.S.
Subsidiaries have been duly authorized and validly issued, are fully paid and
nonassessable and, except as otherwise set forth in the Prospectus, are owned
beneficially by the Company free and clear of any perfected security interests
or, to the knowledge of such counsel, any other security interests, liens,
encumbrances, equities or claims;
(iv) after giving effect to the amendment to the Company's Articles
of Organization described in the Prospectus, the Company's authorized, issued
and outstanding capitalization is as set forth in the Prospectus; all of the
issued shares of capital stock of the Company have been duly authorized and
validly issued and are fully paid and nonassessable, have been issued in
compliance with all applicable federal and state securities laws and were not
issued in violation of or subject to any preemptive rights or other rights to
subscribe for or purchase securities; the Securities to be issued by the Company
pursuant to this Agreement have been duly authorized by all necessary corporate
action of the Company and, when issued and delivered to and paid for by the
Underwriters pursuant to this Agreement, will be validly issued, fully paid and
nonassessable; the Securities have been duly included for trading on the Nasdaq
National Market; no holders of outstanding shares of capital stock of the
Company are entitled as such to any preemptive or other rights to subscribe for
any of the Securities under the Articles of Organization or By-Laws, as in
effect on the date of this opinion, of the Company, or under any statute, rule
or regulation, or under any agreement known to such counsel; and no holders of
securities of the Company are entitled to have such securities registered under
the Registration Statement pursuant to any agreement known to such counsel,
other than those holders whose Securities are included in the Registration
Statement or who have waived such rights;
(v) the statements set forth under the heading "Description of
Capital Stock" in the Prospectus, insofar as such statements purport to
summarize certain provisions of the capital stock of the Company, provide a fair
summary of such provisions; and the statements set forth under the heading
"Management -- Stock Option and Stock Purchase Plans";
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(vi) the execution and delivery of this Agreement have been duly
authorized by all necessary corporate action of the Company and this Agreement
has been duly executed and delivered by the Company;
(vii) (A) to the knowledge of such counsel after due inquiry
consisting solely of inquiry of the executive officers of the Company and a
docket search in state courts in Massachusetts and federal courts sitting in
Massachusetts, no legal or governmental proceedings are pending to which the
Company or any of the U.S. Subsidiaries is a party or to which the property of
the Company or any of the U.S. Subsidiaries is subject that are required to be
described in the Registration Statement or the Prospectus and are not described
therein, and, to the knowledge of such counsel, no such proceedings have been
threatened against the Company or any of the U.S. Subsidiaries or with respect
to any of their respective properties and (B) no contract or other document
known to such counsel is required to be described in the Registration Statement
or the Prospectus or to be filed as an exhibit to the Registration Statement
that is not described therein or filed as required;
(viii) the issuance, offering and sale of the Securities to the
Underwriters by the Company pursuant to this Agreement, the compliance by the
Company with the other provisions of this Agreement and the consummation of the
other transactions herein contemplated do not (A) require the consent, approval,
authorization, registration or qualification of or with any governmental
authority, except such as have been obtained and such as may be required under
state securities or blue sky laws, or (B) result in a breach or violation of any
of the terms and provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, lease or other agreement or instrument, known to such
counsel all of which may be listed in an exhibit to such counsel's opinion, to
which the Company or any of the U.S. Subsidiaries is a party or by which the
Company or any of the U.S. Subsidiaries or any of their respective properties
are bound, or the charter documents or by-laws of the Company or any of the U.S.
Subsidiaries, or any statute or any judgment, decree, order, rule or regulation
of any court or other governmental authority or any arbitrator known to such
counsel and applicable to the Company or U.S. Subsidiaries;
(ix) such counsel has been informed by the Commission that the
Registration Statement is effective under the Act; any required filing of the
Prospectus, or any Term Sheet that constitutes a part thereof, pursuant to Rules
434 and 424(b) has been made in the manner and within the time period required
by Rules 434 and 424(b); such counsel has been informed by the Commission that
no stop order suspending the effectiveness of the Registration Statement or any
amendment thereto has been issued, and, to such counsel's knowledge, no
proceedings for that purpose have been instituted or threatened or, are
contemplated by the Commission;
(x) the Registration Statement originally filed with respect to the
Securities and each amendment thereto, any Rule 462(b) Registration Statement
and the Prospectus (in each case, other than the financial statements and other
financial information contained therein, as to which such counsel need express
no opinion) comply as to form in all material respects with the applicable
requirements of the Act and the rules and regulations of the Commission
thereunder; and
(xi) if the Company elects to rely on Rule 434, the Prospectus is
not "materially different", as such term is used in Rule 434, from the
prospectus included in the Registration Statement at the time of its
effectiveness or an effective post-effective amendment thereto (including such
information that is permitted to be omitted pursuant to Rule 430A).
Such counsel shall also state that they have no reason to believe
that the Registration Statement, as of its effective date, contained any untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary to make the statements therein not misleading or
that the Prospectus, as of its date or the date of such opinion, included or
includes any untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
(b)(2) The Representatives shall have received an opinion, dated the
Firm Closing Date, of Xxxxxxxx, Xxxxxxx & Xxxxxxx (or such other counsel
acceptable to the Representatives) substantially to the effect that:
(i) each Selling Stockholder has full corporate, partnership or
trust power, as applicable, to enter into this Agreement, the Custody Agreement
and the Power-of-Attorney and to sell, transfer and deliver
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the Securities being sold by such Selling Stockholder hereunder in the manner
provided in this Agreement and to perform its obligations under the Custody
Agreement; if such Selling Stockholder is a corporation, the execution and
delivery of this Agreement, the Custody Agreement and the Power-of-Attorney have
been duly authorized by all necessary corporate action of each Selling
Stockholder; this Agreement, the Custody Agreement and the Power-of-Attorney
have been duly executed and delivered by each Selling Stockholder; the Custody
Agreement and the Power-of-Attorney are the legal, valid, binding and
enforceable instruments of each Selling Stockholder, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors' rights generally
and subject, as to enforceability, to general principles of equity (regardless
of whether enforcement is sought in a proceeding in equity or at law);
(ii) when the Underwriters obtain control of the Securities to be
sold by the Selling Stockholders, assuming that the Underwriters purchased such
Securities for value and without notice of any adverse claim to such Securities
within the meaning of Section 8-102 of the Uniform Commercial Code as in effect
in the Commonwealth of Massachusetts, the Underwriters will have acquired all
rights of the Selling Stockholders in such Securities free of any adverse claim;
(iii) the sale of the Securities to the Underwriters by each Selling
Stockholder pursuant to this Agreement, the compliance by such Selling
Stockholder with the other provisions of this Agreement, the Custody Agreement
and the consummation of the other transactions herein contemplated do not (i)
require the consent, approval, authorization, registration or qualification of
or with any governmental authority, except such as have been obtained and such
as may be required under state securities or blue sky laws, or (ii) conflict
with or result in a breach or violation of any of the terms and provisions of,
or constitute a default under any indenture, mortgage, deed of trust, lease or
other agreement or instrument to which such Selling Stockholder is a party or by
which such Selling Stockholder or any of such Selling Stockholder's properties
are bound, or the charter documents or by-laws of such Selling Stockholder or
any of its subsidiaries or any statute or any judgment, decree, order, rule or
regulation of any court or other governmental authority or any arbitrator
applicable to such Selling Stockholder.
In rendering any such opinion, such counsel may rely, as to matters
of fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company and public officials, the Selling Stockholders and
representations and warranties of the Company and the Selling Stockholders
contained herein, in the Custody Agreements and in the Powers of Attorney.
(b)(3) The Representatives shall have received opinions of counsel,
dated the Firm Closing Date, from local counsel to each of the Company's
subsidiaries organized outside of the United States in form and substance
satisfactory to the Representatives and counsel to the Representatives.
References to the Registration Statement and the Prospectus in this
paragraph (b) shall include any amendment or supplement thereto at the date of
such opinion.
(c) The Representatives shall have received an opinion, dated the
Firm Closing Date, of Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP, counsel for the
Underwriters, with respect to the issuance and sale of the Firm Securities, the
Registration Statement and the Prospectus, and such other related matters as the
Representatives may reasonably require, and the Company shall have furnished to
such counsel such documents as they may reasonably request for the purpose of
enabling them to pass upon such matters.
(d) The Representatives shall have received from Coopers & Xxxxxxx
L.L.P. a letter or letters dated, respectively, the date hereof and the Firm
Closing Date, in form and substance satisfactory to the Representatives, to the
effect that:
(i) they are independent accountants with respect to the Company and
its consolidated subsidiaries within the meaning of the Act and the applicable
rules and regulations thereunder;
(ii) in their opinion, the audited consolidated financial statements
examined by them and included in the Registration Statement and the Prospectus
comply in form in all material respects with the applicable accounting
requirements of the Act and the related published rules and regulations;
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(iii) on the basis of a reading of the latest available interim
unaudited consolidated financial statements of the Company, a reading of the
unaudited amounts for revenues, cost of revenues, net income before income taxes
and total and per share amounts of net income as of and for the three months
ended September 30, 1997 and of the unaudited consolidated financial statements
of the Company and its consolidated subsidiaries for the periods from which such
amounts are derived, carrying out certain specified procedures (which do not
constitute an examination made in accordance with generally accepted auditing
standards) that would not necessarily reveal matters of significance with
respect to the comments set forth in this paragraph (iii), a reading of the
minute books of the stockholders, the board of directors and any committees
thereof of the Company and each of its consolidated subsidiaries, and inquiries
of certain officials of the Company and its consolidated subsidiaries who have
responsibility for financial and accounting matters, nothing came to their
attention that caused them to believe that:
(A) the unaudited consolidated financial statements of the Company
included in the Registration Statement and the Prospectus do not
comply in form in all material respects with the applicable
accounting requirements of the Act and the related published rules
and regulations thereunder or are not in conformity with generally
accepted accounting principles applied on a basis substantially
consistent with that of the audited consolidated financial
statements included in the Registration Statement and the
Prospectus;
(B) the unaudited amounts for revenues, cost of revenues, net income
before income taxes and total and per share amounts of net income
included in the Registration Statement and the Prospectus do not
agree with the amounts set forth in any unaudited consolidated
financial statements for those same periods or are not in conformity
with generally accepted accounting principles applied on a basis
substantially consistent with that of the corresponding amounts in
the audited consolidated financial statements included in the
Registration Statement and the Prospectus; and
(C) at a specific date not more than five business days prior to the
date of such letter, there were any changes in the capital stock or
long-term debt of the Company and its consolidated subsidiaries or
any decreases in net current assets or stockholders' equity of the
Company and its consolidated subsidiaries, in each case compared
with amounts shown on the September 30, 1997 unaudited consolidated
balance sheet included in the Registration Statement and the
Prospectus, or for the period from November 1, 1997 to such
specified date there were any decreases, as compared with the
corresponding period in the preceding year, in revenues, cost of
revenues, net income before income taxes or total or per share
amounts of net income of the Company and its consolidated
subsidiaries, except in all instances for changes, decreases or
increases set forth in such letter; and
(iv) they have carried out certain specified procedures, not
constituting an audit, with respect to certain amounts, percentages and
financial information that are derived from the general accounting records of
the Company and its consolidated subsidiaries and are included in the
Registration Statement and the Prospectus under the captions Prospectus Summary,
Risk Factors, Use of Proceeds, Capitalization, Selected Financial Data,
Management's Discussion and Analysis of Financial Condition and Results of
Operations, Business and Description of Capital Stock, and in Exhibit 11 to the
Registration Statement, and have compared such amounts, percentages and
financial information with such records of the Company and its consolidated
subsidiaries and with information derived from such records and have found them
to be in agreement, excluding any questions of legal interpretation.
In the event that the letters referred to above set forth any such
changes, decreases or increases, it shall be a further condition to the
obligations of the Underwriters that (A) such letters shall be accompanied by a
written explanation of the Company as to the significance thereof, unless the
Representatives deem such explanation unnecessary, and (B) such changes,
decreases or increases do not, in the sole judgment of the Representatives, make
it impractical or inadvisable to proceed with the purchase and delivery of the
Securities as contemplated by the Registration Statement, as amended as of the
date hereof.
References to the Registration Statement and the Prospectus in this
paragraph (d) with respect to either letter referred to above shall include any
amendment or supplement thereto at the date of such letter.
(e) The Representatives shall have received a certificate, dated the
Firm Closing Date, of the principal executive officer and the principal
financial or accounting officer of the Company to the effect that:
(i) the representations and warranties of the Company in
this Agreement are true and correct as if made on and as of the Firm
Closing
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Date; the Registration Statement, as amended as of the Firm Closing
Date, does not include any untrue statement of a material fact or
omit to state any material fact necessary to make the statements
therein not misleading, and the Prospectus, as amended or
supplemented as of the Firm Closing Date, does not include any
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, not misleading; and
the Company has performed all covenants and agreements and satisfied
all conditions on its part to be performed or satisfied at or prior
to the Firm Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement or any amendment thereto has been issued, and
no proceedings for that purpose have been instituted or threatened
or, to the best of the Company's knowledge, are contemplated by the
Commission; and
(iii) subsequent to the respective dates as of which
information is given in the Registration Statement and the
Prospectus, neither the Company nor any of its subsidiaries has
sustained any material loss or interference with their respective
businesses or properties from fire, flood, hurricane, accident or
other calamity, whether or not covered by insurance, or from any
labor dispute or any legal or governmental proceeding, and there has
not been any material adverse change, or any development involving a
prospective material adverse change, in the condition (financial or
otherwise), management, business prospects, net worth or results of
operations of the Company or any of its subsidiaries, except in each
case as described in or contemplated by the Prospectus (exclusive of
any amendment or supplement thereto).
(f) The Representatives shall have received a certificate, dated the
Firm Closing Date, from each Selling Stockholder, signed by one of the
Attorneys-in-Fact, to the effect that:
(i) the representations and warranties of such Selling
Stockholder in this Agreement are true and correct as if made on and
as of the Firm Closing Date;
(ii) to the extent that any statements or omissions are made
in the Registration Statement, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto in reliance upon
and in conformity with written information furnished to the Company
by such Selling Stockholder specifically for use therein, the
Registration Statement, as amended as of the Firm Closing Date, does
not include any untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein not
misleading, and the Prospectus, as amended or supplemented as of the
Firm Closing Date, does not include any 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, not misleading; and
(iii) such Selling Stockholder has performed all covenants
and agreements on its part to be performed or satisfied at or prior
to the Firm Closing Date.
(g) The Representatives shall have received (subject to certain
limited exceptions to be agreed upon by the Representatives) from each person
who is a director or executive officer of the Company or who owns 5,000 shares
of Common Stock or more an agreement to the effect that such person will not,
directly or indirectly, without the prior written consent of Prudential
Securities Incorporated, on behalf of the Underwriters, offer, sell, offer to
sell, contract to sell, pledge, grant any option to purchase or otherwise sell
or dispose (or announce any offer, sale, offer of sale, contract of sale,
pledge, grant of an option to purchase or other sale or disposition) of any
shares of Common Stock or any securities convertible into, or exchangeable or
exercisable for, shares of Common Stock for a period of 180 days after the date
of this Agreement; PROVIDED, HOWEVER, that notwithstanding the Restrictions,
such person shall be permitted to make the following transfers: (i) transfers of
shares of Common Stock made by gift, provided the donee thereof agrees in
writing to be bound by the Restrictions; (ii) transfers of shares of Common
Stock to members of such person's immediate family or to a trust or similar
estate planning entity established for the benefit of such person or a member of
such person's immediate family, provided that each transferee agrees in writing
to be bound by the Restrictions; (iii) transfers of shares of Common Stock to
the transferor's affiliates, as such term is defined in Rule 405 under the Act,
provided that each transferee agrees in writing to be bound by the Restrictions;
(iv) transfers of shares of Common Stock made with the prior written consent of
Prudential Securities Incorporated on behalf of the Underwriters; and (v)
transfers of shares of Common Stock pursuant to the Registration Statement.
Prudential Securities Incorporated may, in its sole discretion, at any time and
without prior notice, release all or any portion of the shares of Common Stock
subject to such agreements.
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(h) On or before the Firm Closing Date, the Representatives and
counsel for the Underwriters shall have received such further certificates,
documents or other information as they may have reasonably requested from the
Company and the Selling Stockholders.
(i) Prior to the commencement of the offering of the Securities, the
Securities shall have been included for trading on the Nasdaq National Market.
All opinions, certificates, letters and documents delivered pursuant
to this Agreement will comply with the provisions hereof only if they are
reasonably satisfactory in all material respects to the Representatives and
counsel for the Underwriters. The Company and the Selling Stockholders shall
furnish to the Representatives such conformed copies of such opinions,
certificates, letters and documents in such quantities as the Representatives
and counsel for the Underwriters shall reasonably request.
The respective obligations of the several Underwriters to purchase
and pay for any Option Securities shall be subject, in their discretion, to each
of the foregoing conditions to purchase the Firm Securities, except that all
references to the Firm Securities and the Firm Closing Date shall be deemed to
refer to such Option Securities and the related Option Closing Date,
respectively.
8. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the Act or Section
20 of the Securities Exchange Act of 1934 (the "Exchange Act"), against any
losses, claims, damages or liabilities, joint or several, to which such
Underwriter or such controlling person may become subject under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement made by
the Company in Section 2 of this Agreement,
(ii) any untrue statement or alleged untrue statement of any
material fact contained in (A) the Registration Statement or any
amendment thereto, any Preliminary Prospectus or the Prospectus or
any amendment or supplement thereto or (B) any application or other
document, or any amendment or supplement thereto, executed by the
Company or based upon written information furnished by or on behalf
of the Company filed in any jurisdiction in order to qualify the
Securities under the securities or blue sky laws thereof or filed
with the Commission or any securities association or securities
exchange (each an "Application"),
(iii) the omission or alleged omission to state in the
Registration Statement or any amendment thereto, any Preliminary
Prospectus or the Prospectus or any amendment or supplement thereto,
or any Application, a material fact required to be stated therein or
necessary to make the statements therein not misleading, or
(iv) any untrue statement or alleged untrue statement of any
material fact contained in any audio or visual materials used in
connection with the marketing of the Securities, including without
limitation, slides, videos, films, and tape recordings,
and will reimburse, as incurred, each Underwriter and each such
controlling person for any legal or other expenses reasonably incurred by such
Underwriter or such controlling person in connection with investigating,
defending against or appearing as a third-party witness in connection with any
such loss, claim, damage, liability or action; PROVIDED, HOWEVER, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any untrue statement
or alleged untrue statement or omission or alleged omission made in such
registration statement or any amendment thereto, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto or any Application in reliance
upon and in conformity with written information furnished to the Company by such
Underwriter through the Representatives specifically for use therein; and
PROVIDED, FURTHER, that the Company will not be liable to any Underwriter or any
person controlling such Underwriter with respect to any such untrue statement or
omission made in any Preliminary Prospectus that is corrected in the Prospectus
(or any amendment or supplement thereto) if the person asserting any such loss,
claim, damage or liability purchased Securities from such Underwriter but was
not sent or given a copy of the Prospectus (as amended or supplemented) at or
prior to the written confirmation of the sale of such Securities to such person
in any case where
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such delivery of the Prospectus (as amended or supplemented) is required by the
Act, unless such failure to deliver the Prospectus (as amended or supplemented)
was a result of noncompliance by the Company with Section 5A(d) and (e) of this
Agreement. This indemnity agreement will be in addition to any liability which
the Company may otherwise have. The Company will not, without the prior written
consent of the Underwriters purchasing, in the aggregate, more than fifty
percent (50%) of the Securities, settle or compromise or consent to the entry of
any judgment in any pending or threatened claim, action, suit or proceeding in
respect of which indemnification may be sought hereunder (whether or not any
such Underwriter or any person who controls any such Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act is a party to
such claim, action, suit or proceeding), unless such settlement, compromise or
consent includes an unconditional release of all of the Underwriters and such
controlling persons from all liability arising out of such claim, action, suit
or proceeding.
(b) Each Principal Selling Stockholder, severally and not jointly,
agrees to indemnify and hold harmless each Underwriter and each person, if any,
who controls any Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter or such controlling
person may become subject under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement made by such
Principal Selling Stockholder in Section 2(B) or (C) of this Agreement, and will
reimburse, as incurred, each Underwriter and each such controlling person for
any legal or other expenses reasonably incurred by such Underwriter or such
controlling person in connection with investigating, defending against or
appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action; PROVIDED, HOWEVER, that such Principal Selling
Stockholder will not be liable to any Underwriter or any person controlling such
Underwriter with respect to any such untrue statement or omission made in any
Preliminary Prospectus that is corrected in the Prospectus (or any amendment or
supplement thereto) if the person asserting any such loss, claim, damage or
liability purchased Securities from such Underwriter but was not sent or given a
copy of the Prospectus (as amended or supplemented) at or prior to the written
confirmation of the sale of such Securities to such person in any case where
such delivery of the Prospectus (as amended or supplemented) is required by the
Act, unless such failure to deliver the Prospectus (as amended or supplemented)
was a result of noncompliance by the Company with Section 5A(d) and (e) of this
Agreement. This indemnity agreement will be in addition to any liability which
such Principal Selling Stockholder may otherwise have. No Principal Selling
Stockholder will, without the prior written consent of the Underwriters
purchasing, in the aggregate, more than fifty percent (50%) of the Securities,
settle or compromise or consent to the entry of any judgment in any pending or
threatened claim, action, suit or proceeding in respect of which indemnification
may be sought hereunder (whether or not any such Underwriter or any person who
controls any such Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act is a party to such claim, action, suit or
proceeding), unless such settlement, compromise or consent includes an
unconditional release of all of the Underwriters and such controlling persons
from all liability arising out of such claim, action, suit or proceeding.
(c) Each Additional Selling Stockholder, severally, and not jointly,
agrees to indemnify and hold harmless the Company, each of its directors, each
of its officers who signs the Registration Statement, each Underwriter and each
person who controls the Company or any Underwriter within the meaning of the Act
or the Exchange Act and each other Additional Selling Stockholder against any
losses, claims, damages or liabilities to which the Company, any such director,
officer, such Underwriter or any such controlling person may become subject
under the Act, the Exchange Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon (i) any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement or any amendment thereto, any
Preliminary Prospectus or the Prospectus or any amendment or supplement thereto,
or any Application or (ii) the omission or the alleged omission to state therein
a material fact required to be stated in the Registration Statement or any
amendment thereto, any Preliminary Prospectus or the Prospectus or any amendment
or supplement thereto, or any Application or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company by such Additional Selling Stockholder for use therein;
PROVIDED, HOWEVER, that such Additional Selling Stockholder will not be liable
to any Underwriter or any person controlling such Underwriter with respect to
any such untrue statement or omission made in any Preliminary Prospectus that is
corrected in the Prospectus (or any amendment or supplement thereto) if the
person asserting any such loss, claim, damage or liability purchased Securities
from such Underwriter but was not sent or given a copy of the Prospectus (as
amended or supplemented) at or prior to the written confirmation of the sale of
such Securities to such person in any case where such delivery of the Prospectus
(as amended or supplemented) is required by the Act, unless such failure to
deliver the Prospectus (as amended or supplemented) was a result of
noncompliance by the Company with Section 5A(d) and (e) of this Agreement; and,
subject to the limitation set forth immediately
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preceding this clause, will reimburse, as incurred, any legal or other expenses
reasonably incurred by the Company, any such director, officer, such Underwriter
or any such controlling person in connection with investigating or defending any
such loss, claim, damage, liability or any action in respect thereof. This
indemnity agreement will be in addition to any liability which any other
Additional Selling Stockholder may otherwise have. Each Additional Selling
Stockholder will not, without the prior written consent of the Underwriter or
Underwriters purchasing, in the aggregate, more than fifty percent (50%) of the
Securities, settle or comprise or consent to the entry of any judgment in any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification may be sought hereunder (whether or not any such Underwriter or
any person who controls any such Underwriter within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act is a party to such claim, action, suit
or proceeding), unless such settlement, compromise or consent includes an
unconditional release of all of the Underwriters and such controlling persons
from all liability arising out of such claim, action, suit or proceeding.
(d) Each Underwriter will, severally and not jointly, indemnify and
hold harmless the Company, each of its directors, each of its officers who
signed the Registration Statement, each Selling Stockholder and each person, if
any, who controls the Company or such Selling Stockholder within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act against any losses,
claims, damages or liabilities to which the Company, any such director or
officer of the Company, such Selling Stockholder or any such controlling person
of the Company or such Selling Stockholder may become subject under the Act, the
Exchange Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (i)
any untrue statement or alleged untrue statement of any material fact contained
in the Registration Statement or any amendment thereto, any Preliminary
Prospectus or the Prospectus or any amendment or supplement thereto, or any
Application, or (ii) the omission or the alleged omission to state therein a
material fact required to be stated in the Registration Statement or any
amendment thereto, any Preliminary Prospectus or the Prospectus or any amendment
or supplement thereto, or any Application or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company by any Underwriter through the Representatives
specifically for use therein; and, subject to the limitation set forth
immediately preceding this clause, will reimburse, as incurred, any legal or
other expenses reasonably incurred by the Company, any such director, officer or
controlling person or such Selling Stockholder in connection with investigating
or defending any such loss, claim, damage, liability or any action in respect
thereof. This indemnity agreement will be in addition to any liability which
such Underwriter may otherwise have. No Underwriter will, without the prior
written consent of the Company, settle or compromise or consent to the entry of
any judgment in any pending or threatened claim, action, suit or proceeding in
respect of which indemnification may be sought hereunder (whether or not the
Company is a party to such claim, action, suit or proceeding), unless such
settlement, compromise or consent includes an unconditional release of the
Company from all liability arising out of such claim, action, suit or
proceeding.
(e) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party otherwise than under
this Section 8. In case any such action is brought against any indemnified
party, and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent
that it may wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel reasonably satisfactory to such
indemnified party; PROVIDED, HOWEVER, that if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be one or more
legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party, the
indemnifying party shall not have the right to direct the defense of such action
on behalf of such indemnified party or parties and such indemnified party or
parties shall have the right to select separate counsel to defend such action on
behalf of such indemnified party or parties. After notice from the indemnifying
party to such indemnified party of its election so to assume the defense thereof
and approval by such indemnified party of counsel appointed to defend such
action, the indemnifying party will not be liable to such indemnified party
under this Section 8 for any legal or other expenses, other than reasonable
costs of investigation, subsequently incurred by such indemnified party in
connection with the defense thereof, unless (i) the indemnified party shall have
employed separate counsel in accordance with the proviso to the next preceding
sentence (it being understood, however, that in connection with such action the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (in addition to local counsel) in any one action or separate
but substantially similar actions in the same jurisdiction arising out of the
same general allegations or circumstances, designated by the Representatives in
the case of paragraph (a) of this Section 8, representing the indemnified
parties under such
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paragraph (a) who are parties to such action or actions) or (ii) the
indemnifying party does not promptly retain counsel reasonably satisfactory to
the indemnified party or (iii) the indemnifying party has authorized the
employment of counsel for the indemnified party at the expense of the
indemnifying party. After such notice from the indemnifying party to such
indemnified party, the indemnifying party will not be liable for the costs and
expenses of any settlement of such action effected by such indemnified party
without the consent of the indemnifying party.
(f) In circumstances in which the indemnity agreement provided for
in the preceding paragraphs of this Section 8 is unavailable or insufficient,
for any reason, to hold harmless an indemnified party in respect of any losses,
claims, damages or liabilities (or actions in respect thereof), each
indemnifying party, in order to provide for just and equitable contribution,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect (i) the relative
benefits received by the indemnifying party or parties on the one hand and the
indemnified party on the other from the offering of the Securities or (ii) if
the allocation provided by the foregoing clause (i) is not permitted by
applicable law, not only such relative benefits but also the relative fault of
the indemnifying party or parties on the one hand and the indemnified party on
the other in connection with the statements or omissions or alleged statements
or omissions that resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Selling
Stockholders on the one hand and the Underwriters on the other shall be deemed
to be in the same proportion as the total net proceeds from the offering (after
discounts but before deducting expenses) received by the Company and the Selling
Stockholders bear to the total underwriting discounts and commissions received
by the Underwriters. The relative fault of the parties shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company, the Selling Stockholders or the
Underwriters, the parties' relative intents, knowledge, access to information
and opportunity to correct or prevent such statement or omission, and any other
equitable considerations appropriate in the circumstances. The Company, the
Selling Stockholders and the Underwriters agree that it would not be equitable
if the amount of such contribution were determined by pro rata or per capita
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take into account
the equitable considerations referred to above in this paragraph (e).
Notwithstanding any other provision of this paragraph (e), no Underwriter shall
be obligated to make contributions hereunder that in the aggregate exceed the
total public offering price of the Securities purchased by such Underwriter
under this Agreement, less the aggregate amount of any damages that such
Underwriter has otherwise been required to pay in respect of the same or any
substantially similar claim, and no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute hereunder are
several in proportion to their respective underwriting obligations and not
joint, and contributions among Underwriters shall be governed by the provisions
of the Prudential Securities Incorporated Master Agreement Among Underwriters.
For purposes of this paragraph (e), each person, if any, who controls an
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement and each person, if any, who controls the Company or any
Selling Stockholder within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act, shall have the same rights to contribution as the Company or
such Selling Stockholder, as the case may be.
(g) Notwithstanding anything in this Agreement to the contrary, the
liability of each Principal Selling Stockholder under this Agreement shall not
exceed the LESSER of (i) that percentage of the total amount of such losses,
claims, damages or liabilities for which the Underwriters or any persons
controlling such Underwriters are entitled to indemnity hereunder equal to the
percentage obtained by dividing the total number of Securities sold by the
Principal Selling Stockholder hereunder by the total number of Securities sold
hereunder or (ii) an amount equal to the initial public offering price of the
Securities (less underwriting discounts and commissions but not expenses) sold
by the Principal Selling Stockholder to the Underwriters.
9. DEFAULT OF UNDERWRITERS. If one or more Underwriters default in
their obligations to purchase Firm Securities or Option Securities hereunder and
the aggregate number of such Securities that such defaulting Underwriter or
Underwriters agreed but failed to purchase is ten percent or less of the
aggregate number of Firm Securities or Option Securities to be purchased by all
of the Underwriters at such time hereunder, the other Underwriters may make
arrangements satisfactory to the Representatives for the purchase of such
Securities by other persons (who may include one or more of the non-defaulting
Underwriters, including the Representatives), but if no such arrangements are
made by the Firm Closing Date or the related Option Closing Date, as the case
may be, the other Underwriters shall be
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obligated severally in proportion to their respective commitments hereunder to
purchase the Firm Securities or Option Securities that such defaulting
Underwriter or Underwriters agreed but failed to purchase. If one or more
Underwriters so default with respect to an aggregate number of Securities that
is more than ten percent of the aggregate number of Firm Securities or Option
Securities, as the case may be, to be purchased by all of the Underwriters at
such time hereunder, and if arrangements satisfactory to the Representatives are
not made within 36 hours after such default for the purchase by other persons
(who may include one or more of the non-defaulting Underwriters, including the
Representatives) of the Securities with respect to which such default occurs,
this Agreement will terminate without liability on the part of any
non-defaulting Underwriter or the Company other than as provided in Section 10
hereof. In the event of any default by one or more Underwriters as described in
this Section 9, the Representatives shall have the right to postpone the Firm
Closing Date or the Option Closing Date, as the case may be, established as
provided in Section 3 hereof for not more than seven business days in order that
any necessary changes may be made in the arrangements or documents for the
purchase and delivery of the Firm Securities or Option Securities, as the case
may be. As used in this Agreement, the term "Underwriter" includes any person
substituted for an Underwriter under this Section 9. Nothing herein shall
relieve any defaulting Underwriter from liability for its default.
10. SURVIVAL. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Company, its
officers, the Selling Stockholders and the several Underwriters set forth in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement shall remain in full force and effect, regardless of (i) any
investigation made by or on behalf of the Company, any of its officers or
directors, the Selling Stockholders, any Underwriter or any controlling person
referred to in Section 8 hereof and (ii) delivery of and payment for the
Securities. The respective agreements, covenants, indemnities and other
statements set forth in Sections 6 and 8 hereof shall remain in full force and
effect, regardless of any termination or cancellation of this Agreement.
11. TERMINATION. (a) This Agreement may be terminated with respect
to the Firm Securities or any Option Securities in the sole discretion of the
Representatives by notice to the Company and the Selling Stockholders given
prior to the Firm Closing Date or the related Option Closing Date, respectively,
in the event that the Company or any of the Selling Stockholders shall have
failed, refused or been unable to perform all obligations and satisfy all
conditions on their respective parts to be performed or satisfied hereunder at
or prior thereto or, if at or prior to the Firm Closing Date or such Option
Closing Date, respectively,
(i) the Company or any of its subsidiaries shall have,
in the sole judgment of the Representatives, sustained any material
loss or interference with their respective businesses or properties
from fire, flood, hurricane, accident or other calamity, whether or
not covered by insurance, or from any labor dispute or any legal or
governmental proceeding or there shall have been any material
adverse change, or any development involving a prospective material
adverse change (including without limitation a change in management
or control of the Company), in the condition (financial or
otherwise), business prospects, net worth or results of operations
of the Company and its subsidiaries, except in each case as
described in or contemplated by the Prospectus (exclusive of any
amendment or supplement thereto);
(ii) trading in the Common Stock shall have been
suspended by the Commission or the New York Stock Exchange or the
Nasdaq National Market (other than such a suspension which includes
a suspension covered by (iii) below);
(iii) trading in securities generally on the New York
Stock Exchange or Nasdaq National Market shall have been suspended
or minimum or maximum prices shall have been established on either
such exchange or market system; or a banking moratorium shall have
been declared by New York or United States authorities; or
(iv) there shall have been (A) an outbreak or escalation
of hostilities between the United States and any foreign power, (B)
an outbreak or escalation of any other insurrection or armed
conflict involving the United States or (C) any other calamity or
crisis or material adverse change in general economic, political or
financial conditions having an effect on the U.S. financial markets
that, in the sole judgment of the Representatives, makes it
impractical or inadvisable to proceed with the public offering or
the delivery of the Securities as contemplated by the Registration
Statement, as amended as of the date hereof.
(b) Termination of this Agreement pursuant to this Section 11 shall
be without liability of any party to any other party except as provided in
Section 10 hereof.
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12. INFORMATION SUPPLIED BY UNDERWRITERS. The statements set forth
in the last paragraph on the front cover page and under the heading
"Underwriting" in any Preliminary Prospectus or the Prospectus (to the extent
such statements relate to the Underwriters) constitute the only information
furnished by any Underwriter through the Representatives to the Company or any
Selling Stockholder for the purposes of Sections 2(A)(b) and 8 hereof. The
Underwriters confirm that such statements (to such extent) are correct.
13. DEFAULT BY SELLING STOCKHOLDERS. If on the Firm Closing Date or
the Option Closing Date any Selling Stockholder fails to sell the Firm
Securities or Option Securities which such Selling Stockholder has agreed to
sell on such date as set forth in SCHEDULE III hereto or Section 3(b) hereof,
the Company agrees that it will sell or arrange for the sale of at least 10% of
that number of shares of Common Stock to the Underwriters which represents Firm
Securities or Option Securities which such Selling Stockholder has failed to so
sell, as set forth in SCHEDULE III hereto or Section 3(b) hereof, or such
lesser number as may be requested by the Representatives.
14. NOTICES. All communications hereunder shall be in writing and,
if sent to any of the Underwriters, shall be delivered or sent by mail, telex
or facsimile transmission and confirmed in writing to Prudential Securities
Incorporated, Xxx Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Equity
Transactions Group (telecopier: (000) 000-0000) with a copy to Xxxxx, Xxxxxxx &
Xxxxxxxxx, LLP, High Street Tower, 000 Xxxx Xxxxxx, Xxxxxx, XX 00000,
Attention: Xxxxxxx X. Xxxxxxx, Esq. (telecopier: (000) 000-0000); if sent to
the Company, shall be delivered or sent by mail, telex or facsimile
transmission and confirmed in writing to the Company at 000 Xxxxxxxxx Xxxx,
Xxxxxxxxxx, XX 00000, Attention: Xxxxx X. Xxxxxxxx, President (telecopier:
(000) 000-0000) with a copy to Xxxxxxxx, Xxxxxxx & Xxxxxxx, A Professional
Corporation, 000 Xxxxxxx Xxxxxx, Xxxxxx, XX 00000, Attention: Xxxxxxx X.
Xxxxxxxx, Xx., Esq. (telecopier: (000) 000-0000); and if sent to any Selling
Stockholder, shall be delivered or sent by mail at its address on the register
of the Company.
15. SUCCESSORS. This Agreement shall inure to the benefit of and
shall be binding upon the several Underwriters, the Company and the Selling
Stockholders and their respective successors and legal representatives, and
nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any other person any legal or equitable right, remedy or
claim under or in respect of this Agreement, or any provisions herein
contained, this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of such persons and
for the benefit of no other person except that (i) the indemnities of the
Company and the Selling Stockholders contained in Section 8 of this Agreement
shall also be for the benefit of any person or persons who control any
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act and (ii) the indemnities of the Underwriters contained in Section
8 of this Agreement shall also be for the benefit of the directors of the
Company, the officers of the Company who have signed the Registration Statement
and any person or persons who control the Company within the meaning of Section
15 of the Act or Section 20 of the Exchange Act and the Selling Stockholders.
No purchaser of Securities from any Underwriter shall be deemed a successor
because of such purchase.
16. APPLICABLE LAW. The validity and interpretation of this
Agreement, and the terms and conditions set forth herein, shall be governed by
and construed in accordance with the laws of the State of New York, without
giving effect to any provisions relating to conflicts of laws.
17. CONSENT TO JURISDICTION AND SERVICE OF PROCESS. All judicial
proceedings arising out of or relating to this Agreement may be brought in any
state or federal court of competent jurisdiction in the State of New York, and
by execution and delivery of this Agreement, the Selling Stockholders accepts
for itself and in connection with its properties, generally and
unconditionally, the nonexclusive jurisdiction of the aforesaid courts and
waives any defense of forum non conveniens and irrevocably agrees to be bound
by any judgment rendered thereby in connection with this Agreement.
18. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
[REMAINDER OF PAGE LEFT BLANK INTENTIONALLY]
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If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter shall constitute an agreement binding the Company, the
Selling Stockholders and each of the several Underwriters.
Very truly yours,
MERCURY COMPUTER SYSTEMS, INC.
By: /s/ G. XXXX XXXXX
-------------------------------------------
Name: G. Xxxx Xxxxx
Title: Vice President, Chief Financial
Officer and Treasurer
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MD CO.
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
MASSMUTUAL CORPORATE INVESTORS
DATA GENERAL CORPORATION
FIRST STAGE CAPITAL LIMITED PARTNERSHIP
XXXXXX XXXXXX
XXXX XXXXXXXX
XXXXXXX XXXXXXXX
XXXXXXX XXXXXXXX 1995 IRREVOCABLE TRUST,
XXXXXXX XXXXXXXX TRUSTEE
XXXXX X. XXXXX
XXXXXXXX X. XXXXX 1990 REVOCABLE TRUST --
TRUST A-2, XXXXXXX X. XXXXXXX, TRUSTEE
XXXXXXX XXXXX XXXXX 1992 REVOCABLE TRUST,
XXXXXXX X. XXXXXXX, TRUSTEE
XXXX XXXXX 1988 REVOCABLE TRUST, XXXXXXX X.
XXXXXXX, TRUSTEE
XXXXX XXXX
XXXXX XXXXXXXX
XXXX XXXXXXXX
XXXX XXXXXXXXXX
DIMENSION ENTERPRISES
XXXX XXXXXXXX, XX.
XXXXX XXXXXXXXX
XXXXX XXXXXX
XXXXX XXXX
XXXXX XXXXX
XXXXXXX XXXXXXXXX
XXXXX POOL
XXXXXX XXXXXX
XXXXXX XXXXX
XXXXXX XXXXXXXXXX
XXXXXXX XXXXX
XXXX XXXXXX
XXXXX XXXXXX
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By: /s/ XXXXX X. XXXXXXXX
-------------------------------------------------
Xxxxx X. Xxxxxxxx, as Attorney-in-Fact, acting
on behalf of each of the above-named Selling
Stockholders
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The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
PRUDENTIAL SECURITIES INCORPORATED
XXXXX & COMPANY
By: PRUDENTIAL SECURITIES INCORPORATED
By: /s/ XXXX-XXXXXX CANFIN
---------------------------------
Xxxx-Xxxxxx Canfin
Managing Director
For itself and on behalf of the Representatives.
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SCHEDULE I
PRINCIPAL SELLING STOCKHOLDERS
(a) (b)
Number of Number of
Firm Securities Option Securities
to be sold to to be sold to
Underwriters Underwriters
------------ ------------
MD Co. 425,000 75,000
First Stage Capital 318,750 56,250
Limited Partnership
Totals
------- -------
743,750 131,250
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SCHEDULE II
ADDITIONAL SELLING STOCKHOLDERS
(a) (b)
Number of Firm Number of Option
Securities to be Securities to be
Sold To Underwriters Sold To Underwriters
-------------------- --------------------
Massachusetts Mutual Life Insurance
Company 106,250 18,750
MassMutual Corporate Investors 106,250 18,750
Data General Corporation 280,500 49,500
Xxxxxx Xxxxxx 21,250 3,750
Xxxx Xxxxxxxx 85,000 15,000
Xxxxxxx Xxxxxxxx 1,700 300
Xxxxxxx Xxxxxxxx 1995 Irrevocable
Trust, Xxxxxxx Xxxxxxxx Trustee 8,500 1,500
Xxxxx X. Xxxxx 29,750 5,250
Xxxxxxxx X. Xxxxx 1990 Revocable
Trust -- Trust A-2, Xxxxxxx B 76,500 13,500
Maraghy, Trustee
Xxxxxxx Xxxxx Xxxxx 1992
Revocable Trust, Xxxxxxx B 7,650 1,350
Maraghy, Trustee
Xxxx Xxxxx 1988 Revocable Trust,
Xxxxxxx X. Xxxxxxx, Trustee 7,650 1,350
Xxxxx Xxxx 399 2,601
Xxxxx Xxxxxxxx 3,400 600
Xxxx Xxxxxxxx 2,550 450
Xxxx Xxxxxxxxxx 320 2,080
Dimension Enterprises 800 5,200
Xxxx Xxxxxxxx, Xx 200 1,300
Xxxxx Xxxxxxxxx 266 1,734
Xxxxx Xxxxxx 399 2,601
Xxxxx Xxxx 666 4,334
Xxxxx Xxxxx 333 2,167
Xxxxxxx Xxxxxxxxx 266 1,734
Xxxxx Pool 266 1,734
Xxxxxx Xxxxxx 399 2,601
Xxxxxx Xxxxx 266 1,734
Xxxxxx Xxxxxxxxxx 6,970 1,230
Xxxxxxx Xxxxx 6,800 1,200
Xxxx Xxxxxx 100 650
Xxxxx Xxxxxx 850 150
------- -------
Totals 756,250 163,100
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SCHEDULE III
UNDERWRITERS
(a) (b) (c) (d)
Number of
Number of firm Number of Option Option
Number of Firm Securites to be Securites to be Securities to
Securities to be Purchased from Purchased from the be Purchased
Purchased From the Selling Selling from the
Underwriter the Company Stockholders Stockholders Company
----------- ----------- ------------ ------------ -------
Prudential Securities
Incorporated 674,285 505,715 99,238 77,762
Xxxxx & Company 674,285 505,715 99,238 77,762
BancAmerica
Xxxxxxxxx
Xxxxxxxx 45,714 34,286 6,728 5,272
Bear, Xxxxxxx & Co.
Inc. 45,714 34,286 6,728 5,272
BT Alex. Xxxxx
Incorporated 45,714 34,286 6,728 5,272
Xxxxxxxxx, Lufkin &
Xxxxxxxx Securities
Corporation 45,714 34,286 6,728 5,272
X.X. Xxxxxxx & Sons,
Inc. 45,714 34,286 6,728 5,272
Xxxxxxx, Xxxxx & Co. 45,714 34,286 6,728 5,272
Xxxxxxxxx & Xxxxx
LLC 45,714 34,286 6,728 5,272
NationsBanc
Xxxxxxxxxx
Securities, Inc. 45,714 34,286 6,728 5,272
PaineWebber
Incorporated 45,714 34,286 6,728 5,272
Xxxxx Xxxxxx Inc. 45,714 34,286 6,728 5,272
Advest, Inc. 22,857 17,143 3,364 2,636
Xxxxx Xxxxxx & Co.,
Inc. 22,857 17,143 3,364 2,636
Xxxxxxx & Company,
Inc. 22,857 17,143 3,364 2,636
Xxxxxxx Xxxxx &
Associates, Inc. 22,858 17,142 3,364 2,636
Soundview Financial
Group, Inc. 22,858 17,142 3,364 2,636
Xxxxxx Xxxxxxx
Incorporated 22,858 17,142 3,364 2,636
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Branch, Xxxxxx and
Company 11,429 8,571 1,682 1,318
Moors & Cabot, Inc. 11,429 8,571 1,682 1,318
Nutmeg Securities,
Ltd.
11,429 8,571 1,682 1,318
The Xxxxxxx Companies
Incorporated 11,429 8,571 1,682 1,318
WIT Capital
Corporation 11,429 8,571 1,682 1,318
Total 2,000,000 1,500,000 294,350 230,650
--------- --------- ------- -------
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SCHEDULE IV
SUBSIDIARIES
Name Jurisdiction Of Organization
---- ----------------------------
Mercury Computer Securities Corporation Massachusetts
Riverneck Road LLC Massachusetts
Mercury Computer International Sales Corp. Delaware
Mercury Computer Systems B.V. The Netherlands
Nihon Mercury Computer Systems K.K. Japan
Mercury Computer Systems S.A.R.L. France
Mercury Systems Ltd. United Kingdom
Mercury Computer Systems Export, Inc. Barbados
33
