1
Exhibit 1.1
FORM OF
CIENA CORPORATION
COMMON STOCK, PAR VALUE $.01 PER SHARE
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UNDERWRITING AGREEMENT
(U.S. VERSION)
_________________, 1997
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.,
Alex. ▇▇▇▇▇ & Sons Incorporated,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, L.L.C.,
As representatives of the several
Underwriters named in Schedule I hereto,
c/o Goldman, Sachs & Co.,
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
Ladies and Gentlemen:
CIENA Corporation, a Delaware corporation (the "Company"), proposes,
subject to the terms and conditions stated herein, to issue and sell to the
Underwriters named in Schedule I hereto (the "Underwriters") an aggregate of
800,000 shares and, at the election of the Underwriters, up to 120,000
additional shares of Common Stock, par value $.01 per share ("Stock") of the
Company and the stockholders of the Company named in Schedule II hereto (the
"Selling Stockholders") propose, subject to the terms and conditions stated
herein, to sell to the Underwriters an aggregate of 7,200,000 shares and, at the
election to the Underwriters, up to 1,080,000 additional shares of Stock. The
aggregate of 8,000,000 shares to be sold by the Company and the Selling
Stockholders is herein called the "Firm Shares" and the aggregate of 1,200,000
additional shares to be sold by the Company and the Selling Stockholders is
herein called the "Optional Shares". The Firm Shares and the Optional Shares
that the Underwriters elect to purchase pursuant to Section 2 hereof are herein
collectively called the "Shares".
It is understood and agreed to by all parties that the Company and the
Selling Stockholders are concurrently entering into an agreement (the
"International Underwriting Agreement") providing for the sale by the Company
and the Selling Stockholders of up to a
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total of _________________ shares of Stock (the "International Shares"),
including the overallotment option thereunder, through arrangements with certain
underwriters outside the United States (the "International Underwriters"), for
whom ▇▇▇▇▇▇▇ ▇▇▇▇▇ International, Alex. ▇▇▇▇▇ & Sons Incorporated and ▇▇▇▇▇▇▇,
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, L.L.C. are acting as lead managers. Anything herein or
therein to the contrary notwithstanding, the respective closings under this
Agreement and the International Underwriting Agreement are hereby expressly made
conditional on one another. The Underwriters hereunder and the International
Underwriters are simultaneously entering into an Agreement between U.S. and
International Underwriting Syndicates (the "Agreement between Syndicates") which
provides, among other things, for the transfer of shares of Stock between the
two syndicates. Two forms of prospectus are to be used in connection with the
offering and sale of shares of Stock contemplated by the foregoing, one relating
to the Shares hereunder and the other relating to the International Shares. The
latter form of prospectus will be identical to the former except for certain
substitute pages. Except as used in Sections 2, 3, 4, 9 and 11 herein, and
except as the context may otherwise require, references hereinafter to the
Shares shall include all the shares of Stock which may be sold pursuant to
either this Agreement or the International Underwriting Agreement, and
references herein to any prospectus whether in preliminary or final form, and
whether as amended or supplemented, shall include both the U.S. and the
international versions thereof.
1. (a)The Company and each Selling Stockholder listed in Annex III
attached hereto jointly and severally represent and warrant to, and
agree with, each of the Underwriters that:
(i) A registration statement on Form S-1 (File No.
333-_________) (the "Initial Registration Statement") in respect
of the Shares has been filed with the Securities and Exchange
Commission (the "Commission"); the Initial Registration
Statement and any post-effective amendment thereto, each in the
form heretofore delivered to you, and, excluding exhibits
thereto, to you for each of the other Underwriters, have been
declared effective by the Commission in such form; other than a
registration statement, if any, increasing the size of the
offering (a "Rule 462(b) Registration Statement"), filed
pursuant to Rule 462(b) under the Securities Act of 1933, as
amended (the "Act"), which will become effective upon filing, no
other document with respect to the Initial Registration
Statement has heretofore been filed with the Commission; and no
stop order suspending the effectiveness of the Initial
Registration Statement, any post-effective amendment thereto or
the Rule 462(b) Registration Statement, if any, has been issued
and no proceeding for that purpose has been initiated or
threatened by the Commission (any preliminary prospectus
included in the Initial Registration Statement or filed with the
Commission pursuant to Rule 424(a) of the rules and regulations
of the Commission under the Act, is hereinafter called a
"Preliminary Prospectus"; the various parts of the Initial
Registration Statement and the Rule 462(b) Registration
Statement, if any, including all exhibits thereto and including
the information contained in the form of final prospectus filed
with the Commission pursuant to Rule 424(b) under the Act in
accordance with Section 5(a) hereof and deemed by virtue of Rule
430A under the Act to be part of the Initial Registration
Statement at the
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time it was declared effective, each as amended at the time such
part of the registration statement became effective or such part
of the Rule 462(b) Registration Statement, if any, became or
hereafter becomes effective, are hereinafter collectively called
the "Registration Statement"; and such final prospectus, in the
form first filed pursuant to Rule 424(b) under the Act, is
hereinafter called the "Prospectus.")
(ii) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, and
each Preliminary Prospectus, at the time of filing thereof,
conformed in all material respects to the requirements of the
Act and the rules and regulations of the Commission thereunder,
and did not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
provided, however, that this representation and warranty shall
not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the
Company by an Underwriter through ▇▇▇▇▇▇▇, Sachs & Co. expressly
for use therein or by a Selling Stockholder expressly for use in
the preparation of the answers therein to Items 7 and 11(l) of
Form S-1;
(iii) The Registration Statement conforms, and the
Prospectus and any further amendments or supplements to the
Registration Statement or the Prospectus will conform, in all
material respects to the requirements of the Act and the rules
and regulations of the Commission thereunder and do not and will
not, as of the applicable effective date as to the Registration
Statement and any amendment thereto and as of the applicable
filing date as to the Prospectus and any amendment or supplement
thereto, contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or
necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall
not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the
Company by an Underwriter through ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. expressly
for use therein or by a Selling Stockholder expressly for use in
the preparation of the answers therein to Items 7 and 11(l) of
Form S-1;
(iv) Neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial
statements included in the Prospectus any material loss or
interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any
labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Prospectus;
and, since the respective dates as of which information is given
in the Registration Statement and the Prospectus, there has not
been any change in the capital stock or long-term debt of the
Company or any of its subsidiaries or any material adverse
change, or any development reasonably likely to result in a
prospective material adverse change, in or affecting the general
affairs, management, financial position,
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stockholders' equity or results of operations of the Company and
its subsidiaries, otherwise than as set forth or contemplated in
the Prospectus;
(v) The Company and its subsidiaries have good and
marketable title in fee simple to all real property and good and
marketable title to all personal property owned by them, in each
case free and clear of all liens, encumbrances and defects
except such as are described in the Prospectus or such as do not
materially affect the value of such property and do not
interfere with the use made and proposed to be made of such
property by the Company and its subsidiaries; and any real
property and buildings held under lease by the Company and its
subsidiaries are held by them under valid leases with such
exceptions as are not material and do not interfere with the use
made and proposed to be made of such property and buildings by
the Company and its subsidiaries;
(vi) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Delaware, with power and authority
(corporate and other) to own its properties and conduct its
business as described in the Prospectus, and has been duly
qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or conducts
any business so as to require such qualification, or is subject
to no material liability or disability by reason of the failure
to be so qualified in any such jurisdiction; and each subsidiary
of the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation;
(vii) The Company has an authorized capitalization as
set forth in the Prospectus, and all of the issued shares of
capital stock of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and
conform to the description of the Stock contained in the
Prospectus; and all of the issued shares of capital stock of
each subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and
conform to the description of the Stock contained in the
Prospectus;
(viii) The Shares to be issued and sold by the Company
to the Underwriters hereunder and under the International
Underwriting Agreement have been duly and validly authorized
and, when issued and delivered against payment therefor as
provided herein, will be duly and validly issued and fully paid
and non-assessable and will conform to the description of the
Stock contained in the Prospectus;
(ix) The issue and sale of the Shares to be sold by the
Company hereunder and under the International Underwriting
Agreement and the compliance by the Company with all of the
provisions of this Agreement and the International Underwriting
Agreement and the consummation of the transactions herein and
therein contemplated will not conflict with or result in a
breach or
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violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company
or any of its subsidiaries is a party or by which the Company or
any of its subsidiaries is bound or to which any of the property
or assets of the Company or any of its subsidiaries is subject,
nor will such action result in any violation of the provisions
of the Certificate of Incorporation or By-laws of the Company or
any of its subsidiaries or any statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any
of their properties; and no consent, approval, authorization,
order, registration or qualification of or with any such court
or governmental agency or body is required for the issue and
sale of the Shares or the consummation by the Company of the
transactions contemplated by this Agreement and the
International Underwriting Agreement, except the registration
under the Act of the Shares and such consents, approvals,
authorizations, registrations or qualifications as may be
required under state or foreign securities or Blue Sky laws in
connection with the purchase and distribution of the Shares by
the Underwriters and the International Underwriters;
(x) Neither the Company nor any of its subsidiaries is
in violation of its Certificate of Incorporation or By-laws or
in default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement lease or
other agreement or instrument to which it is a party or by which
it or any of its properties may be bound;
(xi) The statements set forth in the Prospectus under
the caption "Description of Capital Stock", insofar as they
purport to constitute a summary of the terms of the Stock, are
accurate and complete in all material respects;
(xii) Other than as set forth or contemplated in the
Prospectus, there are no legal or governmental proceedings
pending to which the Company or any of its subsidiaries is a
party or of which any property of the Company or any of its
subsidiaries is the subject which, if determined adversely to
the Company or any of its subsidiaries, would individually or in
the aggregate have a material adverse effect on the current or
future consolidated financial position, stockholders' equity or
results of operations of the Company and its subsidiaries; and,
other than as set forth or contemplated in the Prospectus, to
the best of the Company's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or
threatened by others;
(xiii) The Company is not and, after giving effect to
the offering and sale of the Shares, 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 (the "Investment Company Act");
(xiv) Price Waterhouse LLP, who have certified certain
financial
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statements of the Company, are independent public accountants as
required by the Act and the rules and regulations of the
Commission thereunder;
(xv) Other than as set forth or contemplated in the
Prospectus, the Company and its subsidiaries have sufficient
interests or rights in all patents, patent licenses, trademarks,
servicemarks, trade names, copyrights, trade secrets,
information proprietary rights and processes ("Intellectual
Property") necessary for their business as now conducted and, to
the Company's knowledge, necessary in connection with the
products and services under development and described in the
Prospectus, without any conflict with or infringement of the
interests or rights of others; except as disclosed in the
Prospectus, the Company is not aware of material outstanding
options, licenses or agreements of any kind relating to the
Intellectual Property, and, except as disclosed in the
Prospectus, neither the Company nor any of its subsidiaries is a
party to or bound by any options, licenses or agreements with
respect to the Intellectual Property of any other person or
entity; none of the technology employed by the Company or any of
its subsidiaries has been obtained or is being used by the
Company or its subsidiaries in violation of any contractual
fiduciary obligation binding on the Company of any of its
subsidiaries of any of its executive officers or, to the
Company's knowledge, any of its employees or otherwise in
violation of the rights of any person; except as disclosed in
the Prospectus, neither of the Company or any of its
subsidiaries nor any of its employees have received any written
or, to the Company's knowledge, oral communications alleging
that the Company or any of its subsidiaries has violated,
infringed or conflicted with (and knows of no such violation,
infringement or conflict) or, by conducting its business as
proposed, would violate, infringe or conflict with (and knows of
no such violation, infringement or conflict) any of the
Intellectual Property of any other person or entity; neither the
execution nor delivery of this Agreement, nor the operation of
the Company's business by the employees of the Company, nor the
operation of the business of any of its subsidiaries, nor the
conduct of the Company's business as proposed or the business of
any of its subsidiaries as proposed, will result in a breach or
violation of the terms, conditions or provisions of, or
constitute a default under, any material contract, covenant or
instrument known to the Company under which any of such
employees is now obligated; and the Company and its subsidiaries
have taken and will maintain reasonable measures to prevent the
unauthorized dissemination or publication of their confidential
information and, to the extent contractually required to do so,
the confidential information of third parties in their
possession;
(xvi) The Company maintains insurance of the types and
in the amounts generally deemed adequate for its business,
including, but not limited to, insurance covering real and
personal property owned or leased by the Company against theft,
damage, destruction, acts of vandalism and all other risks
customarily insured against, all of which insurance is in full
force and effect;
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(xvii) There are no contracts, other documents or other
agreements required to be described in the Registration
Statement or to be filed as exhibits to the Registration
Statement by the Act or by the rules and regulations thereunder
which have not been described or filed as required; the
contracts so described in the Prospectus are in full force and
effect on the date hereof; and neither the Company nor, to the
best of the Company's knowledge, any other party is in breach of
or default in any material respect under any of such contracts;
and
(xviii)The Company has not been advised, and has no
reason to believe, that it is not conducting business in
compliance with all applicable laws, rules and regulations of
the jurisdictions in which it is conducting business, including,
without limitation, all applicable local, state and federal
environmental laws and regulations; except where failure to be
so in compliance would not materially adversely affect the
condition (financial or otherwise), business, results of
operations or prospects of the Company.
(b) Each of the Selling Stockholders severally represents and
warrants to, and agrees with, each of the Underwriters and the Company
that:
(i) All consents, approvals, authorizations and orders
necessary for the execution and delivery by such Selling
Stockholder of this Agreement, the International Underwriting
Agreement, the Power of Attorney and the Custody Agreement
hereinafter referred to, and for the sale and delivery of the
Shares to be sold by such Selling Stockholder hereunder and
under the International Underwriting Agreement, have been
obtained; and such Selling Stockholder has full right, power and
authority to enter into this Agreement, the International
Underwriting Agreement, the Power of Attorney and the Custody
Agreement and to sell, assign, transfer and deliver the Shares
to be sold by such Selling Stockholder hereunder and under the
International Underwriting Agreement;
(ii) The sale of the Shares to be sold by such Selling
Stockholder hereunder and under the International Underwriting
Agreement and the compliance by such Selling Stockholder with
all of the provisions of this Agreement, the International
Underwriting Agreement, the Power of Attorney and the Custody
Agreement and the consummation of the transactions herein and
therein contemplated will not conflict with or result in a
breach or violation of any of the terms or provisions of, or
constitute a default under, any statute, indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument
to which such Selling Stockholder is a party or by which such
Selling Stockholder is bound, or to which any of the property or
assets of such Selling Stockholder is subject, nor will such
action result in any violation of the provisions of the
Certificate of Incorporation or By-laws of such Selling
Stockholder, if such Selling Stockholder is a corporation, or
the Partnership Agreement of such Selling Stockholder, if such
Selling Stockholder is a partnership, or any statute or any
order, rule or regulation of any court or governmental agency or
body having jurisdiction over such Selling Stockholder
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or the property of such Selling Stockholder;
(iii) Such Selling Stockholder has, and immediately
prior to each Time of Delivery (as defined in Section 4 hereof)
such Selling Stockholder will have, good and valid title to the
Shares to be sold by such Selling Stockholder hereunder and
under the International Underwriting Agreement, free and clear
of all liens, encumbrances, equities or claims; and, upon
delivery of such Shares and payment therefor pursuant hereto and
thereto, good and valid title to such Shares, free and clear of
all liens, encumbrances, equities or claims, will pass to the
several Underwriters or the International Underwriters, as the
case may be;
(iv) During the period beginning from the date hereof
and continuing to and including the date 90 days after the date
of the Prospectus, such Selling Stockholder shall not offer,
sell, contract to sell or otherwise dispose of, except as
provided hereunder or under the International Underwriting
Agreement, any securities of the Company that are substantially
similar to the Shares, including but not limited to any
securities that are convertible into or exchangeable for, or
that represent the right to receive, Stock or any such
substantially similar securities (other than (A) pursuant to
employee stock option plans existing on, or upon the conversion
or exchange of convertible or exchangeable securities
outstanding as of, the date of this Agreement, or (B) Stock the
sale of which was consented to by you by letter dated May 22,
1997), without the prior written consent of the Company and you;
(v) Such Selling Stockholder has not taken and will not
take, directly or indirectly, any action which is designed to or
which has constituted or which might reasonably be expected to
cause or result in stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of
the Shares;
(vi) To the extent that any statements or omissions made
in the Registration Statement, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto are made in
reliance upon and in conformity with written information
furnished to the Company by such Selling Stockholder expressly
for use therein, such Preliminary Prospectus and the
Registration Statement did, and the Prospectus and any further
amendments or supplements to the Registration Statement and the
Prospectus, when they become effective or are filed with the
Commission, as the case may be, will conform in all material
respects to the requirements of the Act and the 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 not misleading;
(vii) In order to document the Underwriters' compliance
with the reporting and withholding provisions of the Tax Equity
and Fiscal Responsibility Act of 1982 with respect to the
transactions herein contemplated, such Selling
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Stockholder will deliver to you prior to or at the First Time of
Delivery (as hereinafter defined) a properly completed and
executed United States Treasury Department Form W-9 (or other
applicable form or statement specified by Treasury Department
regulations in lieu thereof);
(viii) Certificates in negotiable form representing all
of the Shares to be sold by such Selling Stockholder hereunder
and under the International Underwriting Agreement have been
placed in custody under a Custody Agreement, in the form
heretofore furnished to you (the "Custody Agreement"), duly
executed and delivered by such Selling Stockholder to
___________________, as custodian (the "Custodian"), and such
Selling Stockholder has duly executed and delivered a Power of
Attorney, in the form heretofore furnished to you (the "Power of
Attorney"), appointing the persons indicated in Schedule II
hereto, and each of them, as such Selling Stockholder's
attorneys-in-fact (the "Attorneys-in-Fact") with authority to
execute and deliver this Agreement and the International
Underwriting Agreement on behalf of such Selling Stockholder, to
determine the purchase price to be paid by the Underwriters and
the International Underwriters to the Selling Stockholders as
provided in Section 2 hereof, to authorize the delivery of the
Shares to be sold by such Selling Stockholder hereunder and
otherwise to act on behalf of such Selling Stockholder in
connection with the transactions contemplated by this Agreement,
the International Underwriting Agreement and the Custody
Agreement; and
(ix) The Shares represented by the certificates held in
custody for such Selling Stockholder under the Custody Agreement
are subject to the interests of the Underwriters hereunder and
the International Underwriters under the International
Underwriting Agreement; the arrangements made by such Selling
Stockholder for such custody, and the appointment by such
Selling Stockholder of the Attorneys-in-Fact by the Power of
Attorney, are to that extent irrevocable; the obligations of the
Selling Stockholders hereunder shall not be terminated by
operation of law, whether by the death or incapacity of any
individual Selling Stockholder or, in the case of an estate or
trust, by the death or incapacity of any executor or trustee or
the termination of such estate or trust, or in the case of a
partnership or corporation, by the dissolution of such
partnership or corporation, or by the occurrence of any other
event; if any individual Selling Stockholder or any such
executor or trustee should die or become incapacitated, or if
any such estate or trust should be terminated, or if any such
partnership or corporation should be dissolved, or if any other
such event should occur, before the delivery of the Shares
hereunder, certificates representing the Shares shall be
delivered by or on behalf of the Selling Stockholders in
accordance with the terms and conditions of this Agreement, of
the International Underwriting Agreement and of the Custody
Agreements; and actions taken by the Attorneys-in-Fact pursuant
to the Powers of Attorney shall be as valid as if such death,
incapacity, termination, dissolution or other event had not
occurred, regardless of whether or not the Custodian, the
Attorneys-in-Fact, or any of them, shall have received notice of
such death,
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incapacity, termination, dissolution or other event.
2. Subject to the terms and conditions herein set forth, the
Company and each of the Selling Stockholders agree, severally and not jointly,
to sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company and each of the Selling
Stockholders, at a purchase price per share of $_________________, the number of
Firm Shares (to be adjusted by you so as to eliminate fractional shares)
determined by multiplying the aggregate number of Firm Shares to be sold by the
Company and each of the Selling Stockholders as set forth opposite their
respective names in Schedule II hereto by a fraction, the numerator of which is
the aggregate number of Firm Shares to be purchased by such Underwriter as set
forth opposite the name of such Underwriter in Schedule I hereto and the
denominator of which is the aggregate number of Firm Shares to be purchased by
all of the Underwriters from the Company and all of the Selling Stockholders
hereunder and (b) in the event and to the extent that the Underwriters shall
exercise the election to purchase Optional Shares as provided below, the Company
and each of the Selling Stockholders agree, severally and not jointly, to sell
to each of the Underwriters, and each of the Underwriters agrees, severally and
not jointly, to purchase from the Company and the Selling Stockholders, at the
purchase price per share set forth in clause (a) of this Section 2, that portion
of the number of Optional Shares as to which such election shall have been
exercised (to be adjusted by you so as to eliminate fractional shares)
determined by multiplying such number of Optional Shares by a fraction the
numerator of which is the maximum number of Optional Shares which such
Underwriter is entitled to purchase as set forth opposite the name of such
Underwriter in Schedule I hereto and the denominator of which is the maximum
number of Optional Shares that all of the Underwriters are entitled to purchase
hereunder.
The Company and the Selling Stockholders, as and to the extent
indicated in Schedule II hereto, hereby grant, severally and not jointly, to the
Underwriters the right to purchase at their election up to ___________ Optional
Shares, at the purchase price per share set forth in the paragraph above, for
the sole purpose of covering overallotments in the sale of the Firm Shares. Any
such election to purchase Optional Shares shall be made in proportion to the
maximum number of Optional Shares to be sold by the Company and each Selling
Stockholder as set forth in Schedule II hereto. Any such election to purchase
Optional Shares may be exercised only by written notice from you to the Company
and the Attorneys-in-fact, given within a period of 30 calendar days after the
date of this Agreement and setting forth the aggregate number of Optional Shares
to be purchased and the date on which such Optional Shares are to be delivered,
as determined by you but in no event earlier than the First Time of Delivery (as
defined in Section 4 hereof) or, unless you and the Company and the
Attorneys-in-fact otherwise agree in writing, earlier than two or later than ten
business days after the date of such notice.
3. Upon the authorization by you of the release of the Firm
Shares, the several Underwriters propose to offer the Firm Shares for sale upon
the terms and conditions set forth in the Prospectus.
4. (a) The Shares to be purchased by each Underwriter hereunder,
in definitive form, and in such authorized denominations and registered
in such names as
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▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., through the facilities of Depository Trust Company
("DTC") may request upon at least forty-eight hours' prior notice to the
Company and the Selling Stockholders shall be delivered by or on behalf
of the Company and the Selling Stockholders to ▇▇▇▇▇▇▇, Sachs & Co., for
the account of such Underwriter, against payment by or on behalf of such
Underwriter of the purchase price therefor by certified or official bank
check or checks, payable to the order of the Company and the Custodian,
as their interests may appear, in Federal (same day) funds. The Company
will cause the certificates representing the Shares to be made available
for checking and packaging at least twenty-four hours prior to the Time
of Delivery (as defined below) with respect thereto at the office of DTC
or its designated custodian (the "Designated Office"). The time and date
of such delivery and payment shall be, with respect to the Firm Shares,
9:30 a.m., New York City time, on ________________, 1997 or such other
time and date as ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., the Company and the Selling
Stockholders may agree upon in writing, and, with respect to the
Optional Shares, 9:30 a.m., New York City time, on the date specified by
▇▇▇▇▇▇▇, Sachs & Co. in the written notice given by ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
of the Underwriters' election to purchase such Optional Shares, or such
other time and date as ▇▇▇▇▇▇▇, Sachs & Co., the Company and the Selling
Stockholders may agree upon in writing. Such time and date for delivery
of the Firm Shares is herein called the "First Time of Delivery", such
time and date for delivery of the Firm Optional Shares, if not the First
Time of Delivery, is herein called the "Second Time of Delivery", and
each such time and date for delivery is herein called a "Time of
Delivery".
(b) The documents to be delivered at each Time of Delivery by or
on behalf of the parties hereto pursuant to Section 7 hereof, including
the cross-receipt for the Shares and any additional documents requested
by the Underwriters pursuant to Section 7(m) hereof, will be delivered
at the offices of ▇▇▇▇ and ▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.,
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇ (the "Closing Location"), and the Shares will be
delivered at the Designated Office, all at each Time of Delivery. A
meeting will be held at the Closing Location at 4:00 p.m., New York City
time, on the New York Business Day next preceding each Time of Delivery,
at which meeting the final drafts of the documents to be delivered
pursuant to the preceding sentence will be available for review by the
parties hereto. For the purposes of this Section 4, "New York Business
Day" shall mean each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in New York are
generally authorized or obligated by law or executive order to close.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you and to
file such Prospectus pursuant to Rule 424(b) under the Act not later
than the Commission's close of business on the second business day
following the execution and delivery of this Agreement, or, if
applicable, such earlier time as may be required by Rule 430A(a)(3)
under the Act; to make no further amendment or any supplement to the
Registration Statement or Prospectus which shall be disapproved by you
promptly after reasonable notice thereof; to advise you, promptly after
it receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or
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becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed and to furnish you copies thereof; to advise
you, promptly after it receives notice thereof, of the issuance by the
Commission of any stop order or of any order preventing or suspending
the use of any Preliminary Prospectus or prospectus, of the suspension
of the qualification of the Shares for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for any
such purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or Prospectus or for
additional information; and, in the event of the issuance of any stop
order or of any order preventing or suspending the use of any
Preliminary Prospectus or prospectus or suspending any such
qualification, promptly to use its best efforts to obtain the withdrawal
of such order;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Shares for offering and sale under the
securities laws of such jurisdictions as you may request and to comply
with such laws so as to permit the continuance of sales and dealings
therein in such jurisdictions for as long as may be necessary to
complete the distribution of the Shares, provided that in connection
therewith the Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any
jurisdiction;
(c) Prior to 10:00 a.m., New York time, on the New York Business
Day next succeeding the date of this Agreement and from time to time, to
furnish the Underwriters with copies of the Prospectus in New York City
in such quantities as you may reasonably request, and, if the delivery
of a prospectus is required at any time prior to the expiration of nine
months after the time of issue of the Prospectus in connection with the
offering or sale of the Shares and if at such time any events shall have
occurred as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or
omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made when such Prospectus is delivered, not misleading, or, if for
any other reason it shall be necessary during such period to amend or
supplement the Prospectus in order to comply with the Act, to notify you
and upon your request to prepare and furnish without charge to each
Underwriter and to any dealer in securities as many copies as you may
from time to time reasonably request of an amended Prospectus or a
supplement to the Prospectus which will correct such statement or
omission or effect such compliance, and in case any Underwriter is
required to deliver a prospectus in connection with sales of any of the
Shares at any time nine months or more after the time of issue of the
Prospectus, upon your request but at the expense of such Underwriter, to
prepare and deliver to such Underwriter as many copies as you may
request of an amended or supplemented Prospectus complying with Section
10(a)(3) of the Act;
(d) If the Company elects to rely upon Rule 462(b), the Company
shall file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) by 10:00 a.m., Washington D.C. time, on the
date of this Agreement, and the Company shall at the time of filing of
either pay to the Commission the filing fee for the Rule 462(b)
Registration Statement or give irrevocable instructions for the payment
of
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such fee pursuant to Rule 111(b) under the Act;
(e) To make generally available to its securityholders as soon
as practicable, but in any event not later than eighteen months after
the effective date of the Registration Statement (as defined in Rule
158(c) under the Act), an earnings statement of the Company and its
subsidiaries (which need not be audited) complying with Section 11(a) of
the Act and the rules and regulations of the Commission thereunder
(including, at the option of the Company, Rule 158);
(f) During the period beginning from the date hereof and
continuing to and including the date 90 days after the date of the
Prospectus, not to offer, sell, contract to sell or otherwise dispose
of, except as provided hereunder and under the International
Underwriting Agreement, any securities of the Company that are
substantially similar to the Shares, including but not limited to any
securities that are convertible into or exchangeable for, or that
represent the right to receive, Stock or any such substantially similar
securities (other than pursuant to employee or director stock option
plans existing on, or upon the conversion, exercise or exchange of
convertible, exercisable or exchangeable securities outstanding as of,
the date of this Agreement), without your prior written consent;
(g) To furnish to its stockholders as soon as practicable after
the end of each fiscal year an annual report (including a balance sheet
and statements of income, stockholders' equity and cash flows of the
Company and its consolidated subsidiaries certified by independent
public accountants) and, as soon as practicable after the end of each of
the first three quarters of each fiscal year (beginning with the fiscal
quarter ending after the effective date of the Registration Statement),
consolidated summary financial information of the Company and its
subsidiaries for such quarter in reasonable detail;
(h) During a period of five years from the effective date of the
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to stockholders, and to
deliver to you (i) as soon as they are available, copies of any reports
and financial statements furnished to or filed with the Commission or
any national securities exchange on which any class of securities of the
Company is listed; and (ii) such additional information concerning the
business and financial condition of the Company as you may from time to
time reasonably request (such financial statements to be on a
consolidated basis to the extent the accounts of the Company and its
subsidiaries are consolidated in reports furnished to its stockholders
generally or to the Commission);
(i) To use the net proceeds received by it from the sale of the
Shares pursuant to this Agreement and the International Underwriting
Agreement in the manner specified in the Prospectus under the caption
"Use of Proceeds"; and
(j) To use its best efforts to list for quotation the Shares on
the Nasdaq National Market System ("NASDAQ").
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6. The Company and each of the Selling Stockholders, jointly and
severally, covenant and agree with one another and with the several Underwriters
that (a) the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Shares under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or producing
any Agreement among Underwriters, this Agreement, the International
Underwriting Agreement, the Agreement between Syndicates, the Selling
Agreements, closing documents (including any compilations thereof) and any other
documents in connection with the offering, purchase, sale and delivery of the
Shares; (iii) all expenses in connection with the qualification of the Shares
for offering and sale under state securities laws as provided in Section 5(b)
hereof, including the fees and disbursements of ▇▇▇▇ and ▇▇▇▇ LLP, as counsel
for the Underwriters in connection with such qualification and in connection
with the Blue Sky surveys; (iv) all fees and expenses in connection with listing
the Shares on NASDAQ; (v) the filing fees incident to, and the fees and
disbursements of counsel for the Underwriters in connection with, securing any
required review by the National Association of Securities Dealers, Inc. of the
terms of the sale of the Shares; (vi) the cost of preparing stock certificates;
(vii) the cost and charges of any transfer agent or registrar; (viii) all other
costs and expenses incident to the performance of its obligations hereunder
which are not otherwise specifically provided for in this Section; (ix) fees and
expenses of one counsel to the Selling Stockholders, not to exceed $10,000; and
(x) each Selling Stockholder's pro rata shares of the fees and expenses of the
Attorneys-in-Fact and the Custodian; and (b) such Selling Stockholder will pay
or cause to be paid all costs and expenses incident to the performance of such
Selling Stockholder's obligations hereunder which are not otherwise specifically
provided for in this Section, including (i) any fees and expenses of counsel for
such Selling Stockholder not provided for above in this Section, (ii) and all
expenses and taxes incident to the sale and delivery of the Shares to be sold by
such Selling Stockholder to the Underwriters hereunder. In connection with
Clause (b) (ii) of the preceding sentence, ▇▇▇▇▇▇▇, Sachs & Co. agrees to pay
New York State stock transfer tax, and the Selling Stockholder agrees to
reimburse ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. for associated carrying costs if such tax payment
is not rebated on the day of payment and for any portion of such tax payment not
rebated. It is understood, however, that the Company shall bear, and the Selling
Stockholders shall not be required to pay or to reimburse the Company for, the
cost of any other matters not directly relating to the sale and purchase of the
Shares pursuant to this Agreement, and that, except as provided in this Section,
and Sections 8 and 11 hereof, the Underwriters will pay all of their own costs
and expenses, including the fees of their counsel, stock transfer taxes on
resale of any of the Shares by them, and any advertising expenses connected with
any offers they may make.
7. The obligations of the Underwriters hereunder, as to the Shares to be
delivered at each Time of Delivery, shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of
the Company and of the Selling Stockholders herein are, at and as of such Time
of Delivery, true and correct, the condition that the Company and the Selling
Stockholders shall have performed all of its and their obligations hereunder
theretofore to be performed, and the following additional conditions:
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(a) The Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed for
such filing by the rules and regulations under the Act and in accordance
with Section 5(a) hereof; no stop order suspending the effectiveness of
the Registration Statement or any part thereof shall have been issued
and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and all requests for additional
information on the part of the Commission shall have been complied with
to your reasonable satisfaction; if the Company has elected to rely upon
Rule 462(b), the Rule 462(b) Registration Statement shall have become
effective by 10:00 p.m., Washington, D.C. time, on the date of this
Agreement;
(b) ▇▇▇▇ and ▇▇▇▇ LLP, counsel for the Underwriters, shall have
furnished to you such opinion or opinions (a draft of such opinion is
attached as Annex II(a) hereto), dated such Time of Delivery, with
respect to the matters covered in paragraphs (i), (ii), (vi), (ix) and
(xiii) of subsection (c) below as well as such other related matters as
you may reasonably request, and such counsel shall have received such
papers and information as they may reasonably request to enable them to
pass upon such matters;
(c) ▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P., counsel for the Company, shall have
furnished to you their written opinion (a draft of such opinion is
attached as Annex II(b) hereto), dated such Time of Delivery, in form
and substance satisfactory to you, to the effect that:
(i) The Company was incorporated and is validly existing
as a corporation in good standing under the laws of the State of
Delaware as of the date specified in such opinion, with
corporate power and corporate authority to own its properties
and conduct its business as described in the Prospectus;
(ii) The Company has authorized capital stock as set
forth in the Prospectus, and all of the issued shares of capital
stock of the Company (including the Shares being delivered at
such Time of Delivery) have been duly and validly authorized and
issued and are fully paid and non-assessable; and the Shares in
all material respects conform to the description of the Stock
contained in the Prospectus;
(iii) The Company has been duly qualified as a foreign
corporation for the transaction of business and is in good
standing under the laws of the State of Maryland;
(iv) Each subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation;
and all of the issued shares of capital stock of each such
subsidiary have been duly and validly authorized and issued, are
fully paid and non-assessable, and are owned directly or
indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims (such counsel being entitled to
rely in respect of the opinion in this clause upon opinions of
local
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counsel and in respect of matters of fact upon certificates of
officers of the Company or its subsidiaries, provided that such
counsel shall state that they believe that both you and they are
justified in relying upon such opinions and certificates);
(v) Nothing has come to the attention of such counsel
that causes it to believe real property and buildings held under
lease by the Company and its subsidiaries are not held by them
under valid leases with such exceptions as are not material and
do not interfere with the use made and proposed to be made of
such property and buildings by the Company and its subsidiaries
and each such lease identified in such opinion is enforceable
against the Company (subject to normal exceptions);
(vi) This Agreement and the International Underwriting
Agreement have been duly authorized, executed and delivered by
the Company;
(vii) The issue and sale of the Shares being delivered
at such Time of Delivery to be sold by the Company and the
compliance by the Company with all of the provisions of this
Agreement and the International Underwriting Agreement as of
such Time of Delivery and the consummation of the transactions
herein and therein contemplated do not conflict with or result
in a breach or violation of any of the terms or provisions of,
or constitute a default under, any agreement or instrument filed
as an exhibit to the Registration Statement, nor will such
action result in any violation of the provisions of the
Certificate of Incorporation or By-laws of the Company or any of
its subsidiaries or any statute, order, rule or regulation known
to such counsel of any court or governmental agency or body
having jurisdiction over the Company or any of its subsidiaries
or any of their properties;
(viii) No consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body having jurisdiction over the Company
or any of its subsidiaries or any of their properties is
required for the issue and sale of the Shares or the
consummation by the Company of the transactions contemplated by
this Agreement and the International Underwriting Agreement as
of the Time of Delivery, except the registration under the Act
of the Shares, and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
or foreign securities or Blue Sky laws in connection with the
purchase and distribution of the Shares by the Underwriters and
the International Underwriters;
(ix) The statements set forth in the Prospectus under
the caption "Description of Capital Stock", insofar as they
purport to constitute a summary of the terms of the Stock, and
under the caption "Certain U.S. Tax Considerations Applicable to
Non-U.S. Holders of Common Stock", insofar as they purport to
describe the provisions of the laws and documents referred to
therein, are accurate in all material respects;
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(x) The Company is not an "investment company" as such
term is defined in the Investment Company Act;
(xi) To the best of such counsel's knowledge, the
Company has not issued any outstanding securities convertible
into or exchangeable for, or outstanding options, warrants or
other rights to purchase or to subscribe for any shares or other
securities of the Company, except as described in the
Prospectus;
(xii) No holder of outstanding shares of capital stock
of the Company has (i) any statutory preemptive right under
Delaware General Corporation Law or, (ii) to such counsel's
knowledge and except as has been waived, any contractual right
to subscribe for any shares of capital stock of the Company
(including the Shares being delivered at such Time of
Delivery)(except that no opinion need be expressed with respect
to the specific ▇▇▇▇▇▇ that are the subject of the legal
proceedings disclosed in the Prospectus under the caption
"Business--Legal Proceedings") or to have any common stock or
other securities of the Company included in the Registration
Statement or the right, as a result of the filing of the
Registration Statement, to require registration of any shares of
Common Stock or other securities of the Company; and
(xiii) The Registration Statement and the Prospectus and
any further amendments and supplements thereto made by the
Company prior to such Time of Delivery (other than the financial
statements and related schedules therein, as to which such
counsel need express no opinion) comply as to form in all
material respects with the requirements of the Act and the rules
and regulations thereunder.
In addition to the matters set forth above, such letter shall
also contain statement of such counsel to the effect that (i) to such counsel's
knowledge and other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its subsidiaries
is a party or of which any property of the Company or any of its subsidiaries is
the subject of which, if determined adversely to the Company could reasonably be
expected individually or in the aggregate to have a material adverse effect on
the financial condition or results of operations of the Company and its
subsidiaries, and, to such counsel's knowledge, no such proceedings are
threatened by governmental authorities or threatened by others; (ii) while such
counsel are not passing upon and do not assume responsibility for, the accuracy,
completeness or fairness of the Registration Statement or the Prospectus, except
for those statements referred to in the opinion in subsection (ix) of this
Section 7(c), or any further amendment or supplement thereto, based upon the
procedures referred to in such letter no facts have come to the attention of
such counsel which lead them to believe that, as of its effective date, the
Registration Statement or any further amendment thereto made by the Company
prior to such Time of Delivery (other than the financial statements and notes
thereto, financial schedules and other financial data included therein, as to
which such counsel need express no opinion) contained an untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements therein not misleading or that, as of its date and as of such Time of
Delivery, the Prospectus or any
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further amendment or supplement thereto made by the Company (other than the
financial statements and notes thereto, schedules and other financial data
included therein, as to which such counsel need express no opinion) contained or
contains an untrue statement of a material fact or omitted or omits to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and (iii) they do not
know of any amendment to the Registration Statement required to be filed or of
any contracts or other documents of a character required to be filed as an
exhibit to the Registration Statement or required to be described in the
Registration Statement or the Prospectus, which are not filed or described as
required.
In rendering such opinion, such counsel may state that they
express no opinion as to the laws of any jurisdiction other than the Federal
laws of the United States, the laws of the State of Maryland, the contract law
of the State of New York and the General Corporation Law of the State of
Delaware.
(d) Fish & Neave, special patent counsel for the Company, shall
have furnished its written opinion (a draft of such opinion is attached
as Annex II(c) hereto), dated such Time of Delivery, with respect to
certain patent law matters.
(e) The Vice President and General Counsel of the Company shall
have furnished to you his written opinion (a draft of such opinion is
attached as Annex II(d) hereto), dated such Time of Delivery, in form
and substance satisfactory to you, to the effect that:
(i) Neither the Company nor any of its subsidiaries is
in violation of its Certificate of Incorporation or, in any
material respect, its By-Laws; and
(ii) To such counsel's knowledge and other than as
described in the Prospectus, there are no legal or governmental
proceedings pending to which the Company or any of its
subsidiaries is the subject; and, to such counsel's knowledge,
no such proceedings are threatened by governmental authorities
or by others.
(f) The respective counsel for each of the Selling Stockholders,
as indicated in Schedule II hereto, each shall have furnished to you
their written opinion (a draft of such opinion is attached as Annex
II(e) hereto) with respect to each of the Selling Stockholders for whom
they are acting as counsel, dated such Time of Delivery, in form and
substance satisfactory to you, to the effect that:
(i) A Power of Attorney and a Custody Agreement have
been duly executed and delivered by such Selling Stockholder and
constitute valid and binding agreements of such Selling
Stockholder in accordance with their terms;
(ii) This Agreement and the International Underwriting
Agreement have been duly executed and delivered by or on behalf
of such Selling Stockholder; and the sale of the Shares to be
sold by such Selling Stockholder hereunder and thereunder and
the compliance by such Selling Stockholder with
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all of the provisions of this Agreement and the International
Underwriting Agreement, the Power of Attorney and the Custody
Agreement and the consummation of the transactions herein and
therein contemplated will not conflict with or result in a
breach or violation of any terms or provisions of, or constitute
a default under, any statute, indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument known to
such counsel to which such Selling Stockholder is a party or by
which such Selling Stockholder is bound, or to which any of the
property or assets of such Selling Stockholder is subject, nor
will such action result in any violation of the Certificate of
Incorporation or By-laws of such Selling Stockholder, if such
Selling Stockholder is a corporation, or the Partnership
Agreement of such Selling Stockholder, if such Selling
Stockholder is a partnership, or the provisions of any order,
rule or regulation known to such counsel of any court or
governmental agency or body having jurisdiction over such
Selling Stockholder or the property of such Selling Stockholder;
(iii) No consent, approval, authorization or order of
any court or governmental agency or body is required for the
consummation of the transactions contemplated by this Agreement
and the International Underwriting Agreement in connection with
the Shares to be sold by such Selling Stockholder hereunder or
thereunder, except such as have been obtained under the Act and
such as may be required under state or foreign securities or
Blue Sky laws in connection with the purchase and distribution
of such Shares by the Underwriters or the International
Underwriters;
(iv) Immediately prior to such Time of Delivery such
Selling Stockholder had good and valid title to the Shares to be
sold at such Time of Delivery by such Selling Stockholder under
this Agreement and the International Underwriting Agreement,
free and clear of all liens, encumbrances, equities or claims,
and full right, power and authority to sell, assign, transfer
and deliver the Shares to be sold by such Selling Stockholder
hereunder and thereunder; and
(v) Good and valid title to such Shares, free and clear
of all liens, encumbrances, equities or claims, has been
transferred to each of the several Underwriters or International
Underwriters, as the case may be, who have purchased such Shares
in good faith and without notice of any such lien, encumbrance,
equity or claim or any other adverse claim within the meaning of
the Uniform Commercial Code.
In rendering such opinion, such counsel may state that they
express no opinion as to the laws of any jurisdiction outside the United States
and in rendering the opinion in subparagraph (iv) such counsel may rely upon a
certificate of such Selling Stockholder in respect of matters of fact as to
ownership of, and liens, encumbrances, equities or claims on the Shares sold by
such Selling Stockholder, provided that such counsel shall state that they
believe that both you and they are justified in relying upon such certificate;
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(g) On the date of the Prospectus at a time prior to the
execution of this Agreement, at 9:30 a.m., New York City time, on the
effective date of any post-effective amendment to the Registration
Statement filed subsequent to the date of this Agreement and also at
each Time of Delivery, Price Waterhouse LLP shall have furnished to you
a letter or letters, dated the respective dates of delivery thereof, in
form and substance satisfactory to you, to the effect set forth in Annex
I hereto (the executed copy of the letter delivered prior to the
execution of this Agreement is attached as Annex I(a) hereto and a draft
of the form of letter to be delivered on the effective date of any
post-effective amendment to the Registration Statement and as of each
Time of Delivery is attached as Annex I(b) hereto;
(h) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
included in the Prospectus any loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the
Prospectus, and (ii) since the respective dates as of which information
is given in the Prospectus there shall not have been any change in the
capital stock or long-term debt of the Company or any of its
subsidiaries or any change, or any development reasonably likely to
result in a prospective change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of
operations of the Company, otherwise than as set forth or contemplated
in the Prospectus, the effect of which, in any such case described in
Clause (i) or (ii), is in the judgment of the Representatives so
material and adverse as to make it impracticable or inadvisable to
proceed with the public offering or the delivery of the Shares being
delivered at such Time of Delivery on the terms and in the manner
contemplated in the Prospectus;
(i) On or after the date hereof there shall not have occurred
any of the following: (i) a suspension or material limitation in trading
in securities generally on the New York Stock Exchange or on NASDAQ;
(ii) a suspension or material limitation in trading in the Company's
securities on NASDAQ; (iii) a general moratorium on commercial banking
activities declared by either Federal, New York State or District of
Columbia authorities; or (iv) the outbreak or escalation of hostilities
involving the United States or the declaration by the United States of a
national emergency or war, if the effect of any such event specified in
this Clause (iv) in the judgment of the Representatives makes it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Shares being delivered at such Time of Delivery on the
terms and in the manner contemplated in the Prospectus;
(j) The Shares to be sold by the Company and the Selling
Stockholders at such Time of Delivery shall have been duly approved for
quotation on NASDAQ;
(k) The Company has obtained and delivered to the Underwriters
executed copies of an agreement from each Selling Stockholder to the
effect set forth in Subsection 1(b)(iv) hereof in form and substance
satisfactory to you;
(l) The Company shall have complied with the provisions of
Section 5(c) hereof
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with respect to furnishing of Prospectuses on the New York Business Day
next succeeding the date of this Agreement; and
(m) The Company and the Selling Stockholders shall have
furnished or caused to be furnished to you at such Time of Delivery
certificates of officers of the Company and of the Selling Stockholders,
respectively, satisfactory to you as to the accuracy of the
representations and warranties of the Company and the Selling
Stockholders, respectively, herein at and as of such Time of Delivery,
as to the performance by the Company and the Selling Stockholders of all
of their respective obligations hereunder to be performed at or prior to
such Time of Delivery, and as to such other matters as you may
reasonably request, and the Company shall have furnished or caused to be
furnished certificates as to the matters set forth in subsections (a)
and (h) of this Section, and as to such other matters as you may
reasonably request.
8. (a) The Company and each of the Selling Stockholders listed on Annex
III, jointly and severally, will indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained in
any Preliminary Prospectus, the Registration Statement or the
Prospectus, or any amendment or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse each Underwriter
for any legal or other expenses reasonably incurred by such Underwriter
in connection with investigating or defending any such action or claim
as such expenses are incurred; provided, however, that the Company and
such Selling Stockholders shall not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or
is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in any Preliminary Prospectus, the
Registration Statement or the Prospectus or any such amendment or
supplement in reliance upon and in conformity with written information
furnished to the Company by any Underwriter through ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
expressly for use therein; provided, further, that the liability of a
Selling Stockholder pursuant to this subsection 8(a) and subsection 8(b)
shall not exceed the product of the number of shares sold by such
Selling Stockholder and the initial public offering price of the Shares
as set forth in the Prospectus.
(b) Each of the Selling Stockholders will indemnify and hold
harmless each Underwriter against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become
subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, in each case to
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the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, the Registration Statement or the Prospectus or
any such amendment or supplement in reliance upon and in conformity with
written information furnished to the Company by such Selling Stockholder
expressly for use therein; and will reimburse each Underwriter for any
legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such action or claim as
such expenses are incurred; provided, however, that such Selling
Stockholder shall not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged
omission made in any Preliminary Prospectus, the Registration Statement
or the Prospectus of any such amendment or supplement in reliance upon
and in conformity with written information furnished to the Company by
any Underwriter through ▇▇▇▇▇▇▇, Sachs & Co. expressly for use therein;
provided, further, that the liability of a Selling Stockholder pursuant
to subsection 8(a) and this subsection 8(b) shall not exceed the product
of the number of shares sold by such Selling Stockholder and the initial
public offering price of the Shares as set forth in the Prospectus.
(c) Each Underwriter will indemnify and hold harmless the
Company and each Selling Stockholder against any losses, claims, damages
or liabilities to which the Company or such Selling Stockholder 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 an untrue statement or alleged untrue statement of
a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, the Registration Statement or the Prospectus or
any such amendment or supplement in reliance upon and in conformity with
written information furnished to the Company by such Underwriter through
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. expressly for use therein; and will reimburse the
Company and each Selling Stockholder for any legal or other expenses
reasonably incurred by the Company or such Selling Stockholder in
connection with investigating or defending any such action or claim as
such expenses are incurred.
(d) Promptly after receipt by an indemnified party under
subsection (a), (b) or (c) above of notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof is
to be made against an indemnifying party under such subsection, notify
the indemnifying party in writing of the commencement thereof; but the
omission so to notify the indemnifying party shall not relieve it from
any liability which it may have to any indemnified party otherwise than
under such subsection. In case any such action shall be brought against
any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with
any other indemnifying party similarly notified, to assume the defense
thereof, with counsel
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23
satisfactory to such indemnified party (which shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party),
and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party
shall not be liable to such indemnified party under such subsection for
any legal expenses of other counsel or any other expenses, in each case
subsequently incurred by such indemnified party, in connection with the
defense thereof other than reasonable costs of investigation. No
indemnifying party shall, without the written consent of the indemnified
party, effect the settlement or compromise of, or consent to the entry
of any judgment with respect to, any pending or threatened action or
claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement,
compromise or judgment (i) includes an unconditional release of the
indemnified party from all liability arising out of such action or claim
and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any indemnified
party.
(e) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party
under subsection (a), (b) or (c) above in respect of any losses, claims,
damages or liabilities (or actions in respect thereof) referred to
therein, then each indemnifying party 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 the relative benefits received
by the Company and the Selling Stockholders on the one hand and the
Underwriters on the other from the offering of the Shares. If, however,
the allocation provided by the immediately preceding sentence is not
permitted by applicable law or if the indemnified party failed to give
the notice required under subsection (c) above, then each indemnifying
party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not
only such relative benefits but also the relative fault of the Company
and the Selling Stockholders on the one hand and the Underwriters on the
other in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities (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 of
the Shares purchased under this Agreement (before deducting expenses)
received by the Company and the Selling Stockholders bear to the total
underwriting discounts and commissions received by the Underwriters with
respect to the Shares purchased under this Agreement, in each case as
set forth in the table on the cover page of the Prospectus. The relative
fault shall be determined by reference to, 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 or the Selling Stockholders on the
one hand or the Underwriters on the other and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company, each of the Selling
Stockholders and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this subsection (e) were
determined by pro rata allocation
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(even if the Underwriters were treated as one entity for such purpose)
or by any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (e). The
amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (e) shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (e), no Underwriter
shall be required to contribute any amount in excess of the amount by
which the total price at which the Shares underwritten by it and
distributed to the public were offered to the public exceeds the amount
of any damages which such Underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (e)
to contribute are several in proportion to their respective underwriting
obligations and not joint.
(f) The obligations of the Company and the Selling Stockholders
under this Section 8 shall be in addition to any liability which the
Company and the respective Selling Stockholders may otherwise have and
shall extend, upon the same terms and conditions, to each person, if
any, who controls any Underwriter within the meaning of the Act; and the
obligations of the Underwriters under this Section 8 shall be in
addition to any liability which the respective Underwriters may
otherwise have and shall extend, upon the same terms and conditions, to
each officer and director of the Company and to each person, if any, who
controls the Company or any Selling Stockholder within the meaning of
the Act.
9. (a) If any Underwriter shall default in its obligation to purchase
the Shares which it has agreed to purchase hereunder at a Time of
Delivery, you may in your discretion arrange for you or another party or
other parties to purchase such Shares on the terms contained herein. If
within thirty-six hours after such default by any Underwriter you do not
arrange for the purchase of such Shares, then the Company and the
Selling Stockholders shall be entitled to a further period of thirty-six
hours within which to procure another party or other parties
satisfactory to you to purchase such Shares on such terms. In the event
that, within the respective prescribed periods, you notify the Company
and the Selling Stockholders that you have so arranged for the purchase
of such Shares, or the Company and the Selling Stockholders notify you
that they have so arranged for the purchase of such Shares, you or the
Company and the Selling Stockholders shall have the right to postpone
such Time of Delivery for a period of not more than seven days, in order
to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus, or in any other documents or
arrangements, and the Company agrees to file promptly any amendments to
the Registration Statement or the Prospectus which in your opinion may
thereby be made necessary. The term "Underwriter" as used in this
Agreement shall include any person substituted under this Section with
like effect as if such person had originally been a party to this
Agreement with respect to
-24-
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such Shares.
(b) If, after giving effect to any arrangements for the purchase
of the Shares of a defaulting Underwriter or Underwriters by you and the
Company and the Selling Stockholders as provided in subsection (a)
above, the aggregate number of such Shares which remains unpurchased
does not exceed one-eleventh of the aggregate number of all of the
Shares to be purchased at such Time of Delivery, then the Company and
the Selling Stockholders shall have the right to require each
non-defaulting Underwriter to purchase the number of Shares which such
Underwriter agreed to purchase hereunder at such Time of Delivery and,
in addition, to require each non-defaulting Underwriter to purchase its
pro rata share (based on the number of Shares which such Underwriter
agreed to purchase hereunder) of the Shares of such defaulting
Underwriter or Underwriters for which such arrangements have not been
made; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
(c) If, after giving effect to any arrangements for the purchase
of the Shares of a defaulting Underwriter or Underwriters by you and the
Company and the Selling Stockholders as provided in subsection (a)
above, the aggregate number of such Shares which remains unpurchased
exceeds one-eleventh of the aggregate number of all of the Shares to be
purchased at such Time of Delivery, or if the Company and the Selling
Stockholders shall not exercise the right described in subsection (b)
above to require non-defaulting Underwriters to purchase Shares of a
defaulting Underwriter or Underwriters, then this Agreement (or, with
respect to the Second Time of Delivery, the obligations of the
Underwriters to purchase and of the Company to sell the Optional Shares)
shall thereupon terminate, without liability on the part of any
non-defaulting Underwriter or the Company or the Selling Stockholders,
except for the expenses to be borne by the Company and the Selling
Stockholders and the Underwriters as provided in Section 6 hereof and
the indemnity and contribution agreements in Section 8 hereof; but
nothing herein shall relieve a defaulting Underwriter from liability for
its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company, the Selling Stockholders and the several
Underwriters, as 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 any investigation (or any statement as to the results thereof)
made by or on behalf of any Underwriter or any controlling person of any
Underwriter, or the Company, or any of the Selling Stockholders, or any officer
or director or controlling person of the Company, or any controlling person of
any Selling Stockholder, and shall survive delivery of and payment for the
Shares.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
neither the Company nor the Selling Stockholders shall then be under any
liability to any Underwriter except as provided in Sections 6 and 8 hereof; but,
if for any other reason any Shares are not delivered by or on behalf of the
Company and the Selling Stockholders as provided herein, the Company and each of
the Selling Stockholders pro rata (based on the number of Shares to be sold by
the Company and such Selling Stockholder hereunder) will reimburse the
Underwriters through you for all out-of-pocket expenses approved in writing by
you, including
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26
fees and disbursements of counsel, reasonably incurred by the Underwriters in
making preparations for the purchase, sale and delivery of the Shares not so
delivered, but the Company and the Selling Stockholders shall then be under no
further liability to any Underwriter in respect of the Shares not so delivered
except as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. on behalf of you as the
representatives; and in all dealings with any Selling Stockholder hereunder, you
and the Company shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of such Selling Stockholder made or given by any
or all of the Attorneys-in-Fact for such Selling Stockholder.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives in care of ▇▇▇▇▇▇▇, Sachs &
Co., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Registration
Department; if to any Selling Stockholder shall be delivered or sent by mail,
telex or facsimile transmission to counsel for such Selling Stockholder at its
address set forth in Schedule II hereto; and if to the Company shall be
delivered or sent by mail, telex or facsimile transmission to the address of the
Company set forth in the Registration Statement, Attention: Secretary; provided,
however, that any notice to an Underwriter pursuant to Section 8(d) hereof shall
be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its Underwriters' Questionnaire or telex
constituting such Questionnaire, which address will be supplied to the Company
or the Selling Stockholders by you upon request. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Company and the Selling Stockholders and, to
the extent provided in Sections 8 and 10 hereof, the officers and directors of
the Company and each person who controls the Company, any Selling Stockholder or
any Underwriter, and their respective heirs, executors, administrators,
successors and assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement. No purchaser of any of the Shares from any
Underwriter shall be deemed a successor or assign by reason merely of such
purchase.
14. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
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If the foregoing is in accordance with your understanding, please sign
and return to us one for the Company and for each of the Representatives plus
one for each counsel and the Custodian, counterparts hereof, and upon the
acceptance hereof by you, on behalf of each of the Underwriters, this letter and
such acceptance hereof shall constitute a binding agreement among each of the
Underwriters, the Company and each of the Selling Stockholders. It is understood
that your acceptance of this letter on behalf of each of the Underwriters is
pursuant to the authority set forth in a form of Agreement among Underwriters
(U.S. Version), the form of which shall be submitted to the Company and the
Selling Stockholders for examination upon request, but without warranty on your
part as to the authority of the signers thereof.
Any person executing and delivering this Agreement as Attorney-in-Fact
for a Selling Stockholder represents by so doing that he has been duly appointed
as Attorney-in-Fact by such Selling Stockholder pursuant to a validly existing
and binding Power of Attorney which authorizes such Attorney-in-Fact to take
such action.
Very truly yours,
CIENA CORPORATION
By:______________________________
---------------------------------
---------------------------------
---------------------------------
By: ____________________________
Name:
Title:
As Attorney-in-Fact acting on behalf
of each of the Selling Stockholders
named in Schedule II to this
Agreement.
Accepted as of the date hereof:
-▇▇-
▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇.
▇▇▇▇. ▇▇▇▇▇ & Sons Incorporated
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, L.L.C.
By: _____________________________
(▇▇▇▇▇▇▇, Sachs & Co.)
On behalf of each of the Underwriters
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SCHEDULE I
NUMBER OF OPTIONAL
SHARES TO BE
TOTAL NUMBER OF SOLD IF
FIRM SHARES MAXIMUM OPTION
TO BE SOLD EXERCISED
---------- ---------
UNDERWRITER
-----------
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
▇▇▇▇. ▇▇▇▇▇ & Sons Incorporated
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, L.L.C.
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30
SCHEDULE II
NUMBER OF OPTIONAL
SHARES TO BE
TOTAL NUMBER OF PURCHASED IF
FIRM SHARES MAXIMUM OPTION
TO BE PURCHASED EXERCISED
--------------- ---------
The Company.
The Selling Stockholders:(a)
(a)These Selling Stockholders are represented by _______________________
and have appointed _______________, _________________ and ______________, and
each of them, as the Attorneys-in-Fact for such Selling Stockholders.
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31
ANNEX I
DESCRIPTION OF COMFORT LETTER
Pursuant to Section 7(g) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with
respect to the Company within the meaning of the Act and the applicable
published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules (and, if applicable,
financial forecasts and/or pro forma financial information) examined by
them and included in the Prospectus or the Registration Statement comply
as to form in all material respects with the applicable accounting
requirements of the Act and the related published rules and regulations
thereunder; and, if applicable, they have made a review in accordance
with standards established by the American Institute of Certified Public
Accountants of the unaudited consolidated interim financial statements,
selected financial data, pro forma financial information, financial
forecasts and/or condensed financial statements derived from audited
financial statements of the Company for the periods specified in such
letter, as indicated in their reports thereon, copies of which have been
furnished separately to the representatives of the Underwriters (the
"Representatives") and are attached hereto;
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants of
the unaudited condensed consolidated statements of income, consolidated
balance sheets and consolidated statements of cash flows included in the
Prospectus as indicated in their reports thereon copies of which are
attached hereto and on the basis of specified procedures including
inquiries of officials of the Company who have responsibility for
financial and accounting matters regarding whether the unaudited
condensed consolidated financial statements referred to in paragraph
(vi)(A)(i) below comply as to form in all material respects with the
applicable accounting requirements of the Act and the related published
rules and regulations, nothing came to their attention that caused them
to believe that the unaudited condensed consolidated financial
statements do not comply as to form in all material respects with the
applicable accounting requirements of the Act and the related published
rules and regulations;
(iv) The unaudited selected financial information with respect
to the consolidated results of operations and financial position of the
Company for the five most recent fiscal years included in the Prospectus
agrees with the corresponding amounts (after restatements where
applicable) in the audited consolidated financial statements for such
five fiscal years;
(v) They have compared the information in the Prospectus under
selected captions
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32
with the disclosure requirements of Regulation S-K and on the basis of
limited procedures specified in such letter nothing came to their
attention as a result of the foregoing procedures that caused them to
believe that this information does not conform in all material respects
with the disclosure requirements of Items 301, 302, 402 and 503(d),
respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available interim
financial statements of the Company, inspection of the minute books of
the Company and its subsidiaries since the date of the latest audited
financial statements included in the Prospectus, inquiries of officials
of the Company responsible for financial and accounting matters and such
other inquiries and procedures as may be specified in such letter,
nothing came to their attention that caused them to believe that:
(A) (i) the unaudited consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the Act and the
related published rules and regulations, or (ii) any material
modifications should be made to the unaudited condensed consolidated
statements of income, consolidated balance sheets and consolidated
statements of cash flows included in the Prospectus for them to be in
conformity with generally accepted accounting principles;
(B) any other unaudited income statement data and balance sheet
items included in the Prospectus do not agree with the corresponding
items in the unaudited consolidated financial statements from which such
data and items were derived, and any such unaudited data and items were
not determined on a basis substantially consistent with the basis for
the corresponding amounts in the audited consolidated financial
statements included in the Prospectus;
(C) the unaudited financial statements which were not included
in the Prospectus but from which were derived any unaudited condensed
financial statements referred to in Clause (A) and any unaudited income
statement data and balance sheet items included in the Prospectus and
referred to in Clause (B) were not determined on a basis substantially
consistent with the basis for the audited consolidated financial
statements included in the Prospectus;
(D) any unaudited pro forma consolidated condensed financial
statements included in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of the Act
and the published rules and regulations thereunder or the pro forma
adjustments have not been properly applied to the historical amounts in
the compilation of those statements;
(E) as of a specified date not more than five days prior to the
date of such letter, there have been any changes in the consolidated
capital stock (other than
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33
issuances of capital stock upon exercise of options and stock
appreciation rights, upon earn-outs of performance shares and upon
conversions of convertible securities, in each case which were
outstanding on the date of the latest financial statements included in
the Prospectus) or any increase in the consolidated long-term debt of
the Company, or any decreases in consolidated net current assets or
stockholders' equity or other items specified by the Representatives, or
any increases in any items specified by the Representatives, in each
case as compared with amounts shown in the latest balance sheet included
in the Prospectus, except in each case for changes, increases or
decreases which the Prospectus discloses have occurred or may occur or
which are described in such letter; and
(F) for the period from the date of the latest financial
statements included in the Prospectus to the specified date referred to
in Clause (E) there were any decreases in consolidated net revenues or
operating profit or the total or per share amounts of consolidated net
income or other items specified by the Representatives, or any increases
in any items specified by the Representatives, in each case as compared
with the comparable period of the preceding year and with any other
period of corresponding length specified by the Representatives, except
in each case for decreases or increases which the Prospectus discloses
have occurred or may occur or which are described in such letter; and
(vii) In addition to the examination referred to in their
report(s) included in the Prospectus and the limited procedures,
inspection of minute books, inquiries and other procedures referred to
in paragraphs (iii) and (vi) above, they have carried out certain
specified procedures, not constituting an examination in accordance with
generally accepted auditing standards, with respect to certain amounts,
percentages and financial information specified by the Representatives,
which are derived from the general accounting records of the Company,
which appear in the Prospectus, or in Part II of, or in exhibits and
schedules to, the Registration Statement specified by the
Representatives, and have compared certain of such amounts, percentages
and financial information with the accounting records of the Company and
have found them to be in agreement.
-3-
34
ANNEX I(a)
COMFORT LETTER DELIVERED PRIOR TO EXECUTION OF THIS AGREEMENT
-4-
35
ANNEX I(b)
UPDATED COMFORT LETTER
-5-
36
ANNEX II(a)
OPINION OF UNDERWRITERS COUNSEL
-6-
37
ANNEX II(b)
OPINION OF COMPANY COUNSEL
-7-
38
ANNEX II(c)
OPINION OF GENERAL COUNSEL FOR THE COMPANY
-8-
39
ANNEX II(d)
OPINION OF SPECIAL PATENT COUNSEL
-9-
40
ANNEX II(e)
OPINION OF COUNSEL FOR SELLING STOCKHOLDERS
-10-
41
ANNEX III
CERTAIN SELLING STOCKHOLDERS
-11-
