THE TITAN CORPORATION
____% Convertible Subordinated Debentures Due 2003
UNDERWRITING AGREEMENT
____________, 1996
UNDERWRITING AGREEMENT
October __, 1996
▇▇▇▇▇▇, Read & Co. Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
as sole Underwriter
Dear Sirs:
The Titan Corporation, a Delaware corporation (the "Company"),
proposes to issue and sell to you as the sole underwriter (the "Underwriter")
$30,000,000 aggregate principal amount of its ____% Convertible Subordinated
Debentures due 2003 (the "Firm Securities"). In addition, solely for the
purpose of covering overallotments, the Company proposes to issue and sell, at
the Underwriter's option, up to $4,500,000 aggregate principal amount of ____%
Convertible Subordinated Debentures due 2003 (the "Additional Securities"). The
Additional Securities and the Firm Securities are collectively referred to as
the "Securities". The Securities are to be issued pursuant to an indenture (the
"Indenture") to be dated as of October __, 1996 between the Company and Norwest
Bank Minnesota, National Association, as trustee. The Securities are
convertible into shares of Common Stock, par value $.01 per share (the "Common
Stock"), of the Company upon the terms and subject to the conditions set forth
in the Indenture. The shares of Common Stock issuable upon conversion of the
Securities are referred to as the "Shares". The Securities and the Shares are
described in the Prospectus which is referred to below.
The Company has filed, in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations thereunder
(collectively, the "Act"), with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3, including a prospectus,
relating to the Securities and the Shares, which incorporates by reference
documents that the Company has filed in accordance with the provisions of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder (collectively, the "Exchange Act"). The Company has furnished to
you, for use by the Underwriter and by dealers, copies of one or more
preliminary prospectuses and all documents incorporated by reference therein
(collectively, the "Preliminary
Prospectus") relating to the Securities and the Shares. Except where the
context otherwise requires, the registration statement as in effect at the time
of execution of this Agreement or, if the registration statement is not yet
effective, as amended when it becomes effective, including all documents filed
as a part thereof or incorporated by reference therein, and including any
registration statement filed pursuant to Rule 462(b) under the Act increasing
the size of the offering registered under the Act and any information contained
in a prospectus subsequently filed with the Commission pursuant to Rule 424(b)
under the Act and deemed to be part of the registration statement at the time of
effectiveness pursuant to Rule 430A under the Act, is herein called the
"Registration Statement", and the prospectus, including all documents
incorporated therein by reference, in the form filed by the Company with the
Commission pursuant to Rule 424(b) under the Act or, if no such filing is
required, in the form of final prospectus included in the Registration Statement
at the time it became effective, is herein called the "Prospectus".
The Company and the Underwriter agree as follows:
1. SALE AND PURCHASE. On the basis of the representations and
warranties and the other terms and conditions herein set forth, the Company
agrees to sell to the Underwriter and the Underwriter agrees to purchase from
the Company, the entire principal amount of Firm Securities being sold pursuant
to this Agreement, at a purchase price of ____% of the principal amount thereof.
You may release the Firm Securities for public sale promptly after this
Agreement becomes effective. You may from time to time increase or decrease the
public offering price after the initial public offering to such extent as you
may determine.
In addition, on the basis of the representations and warranties and
the other terms and conditions herein set forth, the Company hereby grants to
the Underwriter an option to purchase, and the Underwriter shall have the right
to purchase from the Company, all or a portion of the Additional Securities as
may be necessary to cover overallotments made in connection with the offering of
the Firm Securities, at the same purchase price per Additional Security to be
paid by the Underwriter to the Company for the Firm Securities. This option may
be exercised in whole or in part from time to time on or before the thirtieth
day following the date hereof, by written notice to the Company. Any such
notice shall set forth the aggregate principal amount of Additional Securities
as to which the option is being exercised, and the date and time when the
Additional Securities are to be delivered (any such date and time being
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herein referred to as an "additional time of purchase"); PROVIDED, HOWEVER, that
no additional time of purchase shall occur earlier than the time of purchase (as
defined below) nor earlier than the third business day* after the date on which
the option shall have been exercised nor later than the eighth business day
after the date on which the option shall have been exercised.
2. PAYMENT AND DELIVERY. Payment of the purchase price for the Firm
Securities shall be made to the Company by certified or official bank check, in
immediately available funds, at the office of ▇▇▇▇▇▇, Read & Co. Inc. in New
York City, against delivery of the certificates for the Firm Securities to you.
Such payment and delivery shall be made at 9:30 A.M., New York City time, on
____________, 1996 (unless another time shall be agreed to by you and the
Company or unless postponed in accordance with the provisions of Section 7).
The time at which such payment and delivery are actually made is called the
"time of purchase". Certificates for the Firm Securities shall be delivered to
you through the facilities of the Depository Trust Company ("DTC") in such names
and in such denominations as you shall specify at least two full business days
preceding the time of purchase. A list of such certificates as registered with
DTC shall be made available to you at least one full business day preceding the
time of purchase.
Payment of the purchase price for the Additional Securities shall be
made at the additional time of purchase in the same manner and at the same
office as the payment for the Firm Securities. Certificates for the Additional
Securities shall be delivered to you through the facilities of the DTC in such
names and in such denominations as you shall specify at least two full business
days preceding the additional time of purchase. A list of such certificates as
registered with DTC shall be made available to you for such purpose at least one
full business day preceding the additional time of purchase.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to the Underwriter that:
(a) Each Preliminary Prospectus filed as part of the Registration
Statement as originally filed or as
---------------
* As used herein, "business day" shall mean a day on which the New York Stock
Exchange is open for trading.
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part of any amendment thereto, or filed pursuant to Rule 424 under the Act,
complied when so filed in all material respects with the Act; when the
Registration Statement becomes or became effective and at all times
subsequent thereto up to the time of purchase and the additional time of
purchase, the Registration Statement and the Prospectus, and any
supplements or amendments thereto, complied and will comply in all material
respects with the provisions of the Act and the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"); and the Registration
Statement at all such times did not and will 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 not
misleading, and the Prospectus at all such times did not and will 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 light of the circumstances under which they were made, not
misleading; PROVIDED, HOWEVER, that the Company makes no representation or
warranty with respect to any statement contained in the Registration
Statement or the Prospectus in reliance upon and in conformity with
information concerning the Underwriter and furnished in writing by or on
behalf of the Underwriter to the Company expressly for use in the
Registration Statement or the Prospectus and set forth in the section of
the Registration Statement and the Prospectus entitled "Underwriting"; the
documents incorporated by reference in the Prospectus, at the time they
were filed with the Commission, complied in all material respects with the
requirements of the Exchange Act, and do 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 light of the
circumstances under which they were made, not misleading, except for untrue
statements or omissions that have been expressly superseded and corrected
by the Prospectus or subsequent Exchange Act reports incorporated by
reference into the Prospectus.
(b) As of June 30 1996, the Company had an authorized capitalization
as set forth under the column entitled "Historical June 30, 1996" in the
section of the Registration Statement and the Prospectus entitled
"Capitalization" and, following the purchase of the Firm Securities, the
capitalization of the Company as of June 30, 1996 (as adjusted to reflect
the purchase of the Firm Securities and the application of the estimated
net proceeds therefrom) will be as set forth under the column entitled "As
Adjusted June 30, 1996"
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in the section of the Registration Statement and the Prospectus entitled
"Capitalization"; all of the issued and outstanding shares of capital stock
of the Company have been duly authorized and validly issued and are fully
paid and nonassessable and are free of statutory and contractual preemptive
rights.
(c) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware with
full corporate power and authority to (i) own its properties and conduct
its business as described in the Registration Statement and the Prospectus
and (ii) execute and deliver this Agreement and the Indenture and to issue,
sell and deliver the Securities as herein contemplated and, upon conversion
of the Securities, to issue and deliver the Shares.
(d) Except for 18% of the outstanding shares of capital stock of
Tomotherapeutics, Inc., all of the issued and outstanding shares of capital
stock of each of the subsidiaries of the Company (the "Subsidiaries") are
owned directly by the Company; all of such shares have been duly authorized
and validly issued and are fully paid and nonassessable and, except as
described in the Prospectus, are owned free and clear of any pledge, lien,
encumbrance, security interest or other claim; except as set forth on
Schedule 3(d) hereto, there are no outstanding rights, subscriptions,
warrants, calls, preemptive rights, options or other agreements of any kind
with respect to the capital stock of any of the Subsidiaries.
(e) Each of the Subsidiaries has been duly incorporated and is
validly existing as a corporation in good standing under the laws of its
respective jurisdiction of incorporation, with full corporate power and
authority to own its respective properties and to conduct its respective
businesses.
(f) Each of the Company and each of the Subsidiaries is duly
qualified or licensed by and is in good standing in each jurisdiction in
which it owns or leases property or conducts its business other than those
jurisdictions in which the failure, individually or in the aggregate, to be
so qualified or licensed could have a material adverse effect on the
properties, assets, operations, business, business prospects or condition
(financial or other) of the Company and the Subsidiaries taken as a whole;
each of the Company and each of the Subsidiaries is in compliance in all
material respects with the laws, orders, rules,
5
regulations and directives issued or administered by each such
jurisdiction.
(g) Neither the Company nor any of the Subsidiaries is in breach of,
or in default under (nor has any event occurred which with notice, lapse of
time or both would constitute a breach of, or default under), its charter
or bylaws, or in the performance or observance of any obligation,
agreement, covenant or condition contained in any indenture, lease,
mortgage, deed of trust, bank loan or credit agreement, material supply
agreement, material license or other agreement or instrument to which the
Company or any of the Subsidiaries is a party or by which any of them may
be bound or affected. The execution, delivery and performance of this
Agreement and the Indenture, the issuance and sale of the Securities, the
application of the net proceeds thereof as described in the Prospectus, the
issuance of the Shares upon conversion of the Securities and the
consummation of the transactions contemplated hereby and thereby will not
conflict with, or result in any breach of or constitute a default under
(nor constitute any event which with notice, lapse of time or both would
constitute a breach of, or default under), the charter or bylaws of the
Company or any of the Subsidiaries or under any provision of any indenture,
lease, mortgage, deed of trust, bank loan or credit agreement, material
supply agreement, material license or other agreement or instrument to
which the Company or any of the Subsidiaries is a party or by which any of
them or their properties may be bound or affected, or under any federal,
state, local or foreign law, regulation or rule or any decree, judgment or
order applicable to the Company or any of the Subsidiaries.
(h) The Securities have been duly authorized by the Company and, when
executed and authenticated in accordance with the terms of the Indenture
and delivered to and paid for by the Underwriter as contemplated hereby,
will constitute legal, valid and binding obligations of the Company
enforceable in accordance with their terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or affecting creditors' rights
generally and general principles of equity. The Shares have been duly
authorized and validly reserved for issuance upon conversion of the
Securities, are sufficient in number to meet the requirements set forth in
the Indenture for conversion of the Securities at the date of issuance of
the Securities and, when issued and delivered upon such
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conversion, will be fully paid and nonassessable, free and clear of any
pledge, lien, encumbrance, security interest, preemptive right or other
claim.
(i) This Agreement has been duly authorized, executed and delivered
by the Company. The Indenture has been duly authorized by the Company and,
when executed and delivered by the Company, will be a legal, valid and
binding agreement of the Company enforceable in accordance with its terms,
except as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or
affecting creditors' rights generally and general principles of equity.
(j) The Securities and the Indenture conform in all material respects
to the description thereof contained in the Registration Statement and
Prospectus; and the certificates for the Securities are in due and proper
form in accordance with the terms of the Indenture.
(k) The capital stock of the Company, including the Shares, conforms
in all material respects to the description thereof contained in the
Registration Statement and the Prospectus; and the certificates for the
Shares, when issued upon conversion of the Securities, will be in due and
proper form and the holders of the Shares will not be subject to personal
liability by reason of being such holders.
(l) No approval, authorization, consent or order of or filing with
any federal, state, local or foreign governmental or regulatory commission,
board, body, authority or agency is required in connection with the
issuance and sale of the Securities as contemplated hereby or in connection
with the issuance of the Shares upon conversion of the Securities, other
than registration of the Securities and the Shares under the Act, clearance
of the offering of the Securities with the National Association of
Securities Dealers, Inc. (the "NASD"), qualification of the Indenture under
the Trust Indenture Act, approval of the Securities and the Shares for
listing by the New York Stock Exchange and any necessary qualification
under the securities or blue sky laws of the various jurisdictions in which
the Securities are being offered by the Underwriter.
(m) No person has the right, contractual or otherwise, to cause the
Company to issue to it, or register pursuant to the Act, any securities of
the Company in consequence of the issue and sale of the
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Securities to the Underwriter hereunder or the issuance of the Shares upon
conversion of the Securities.
(n) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, whose reports on the consolidated financial
statements of the Company and the Subsidiaries are included or incorporated
by reference in the Registration Statement and the Prospectus, are
independent public accountants with respect to the Company as required by
the Act and the applicable published rules and regulations thereunder.
(o) All legal or governmental proceedings, contracts or documents of
a character required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement have
been so described or filed as required.
(p) Except as disclosed or incorporated by reference in the
Registration Statement or the Prospectus, there is no action, suit or
proceeding pending or threatened against the Company or any of the
Subsidiaries or any of their properties, at law or in equity, or before or
by any federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency that could reasonably be
expected to result in a judgment, decree or order having a material adverse
effect on the properties, assets, operations, business, business prospects
or condition (financial or other) of the Company and the Subsidiaries taken
as a whole.
(q) The audited and unaudited financial statements included in the
Registration Statement and the Prospectus present fairly the consolidated
financial condition of the Company and the Subsidiaries as of the dates
indicated and the consolidated results of operations and cash flows of the
Company and the Subsidiaries for the periods specified; such financial
statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis during the periods
involved.
(r) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, and except as may
be otherwise stated in the Registration Statement or the Prospectus, there
has not been: (A) any material adverse change in the properties, assets,
operations, business, business prospects or condition (financial or other),
present or prospective, of the Company and the Subsidiaries taken as a
whole; (B) any transaction,
8
that is material to the Company and the Subsidiaries taken as a whole,
contemplated or entered into by the Company or any of the Subsidiaries; or
(C) any obligation, contingent or otherwise, directly or indirectly
incurred by the Company or any of the Subsidiaries that is material to the
Company and the Subsidiaries taken as a whole.
(s) The Company has obtained the agreement of the officers and
directors listed on Schedule A not to sell, contract to sell, grant any
option to sell, transfer or otherwise dispose of, directly or indirectly,
any shares of Common Stock, or securities convertible into or exchangeable
for Common Stock or warrants or other rights to purchase Common Stock, for
a period of 180 days from the date of the Prospectus without the prior
written consent of ▇▇▇▇▇▇, Read & Co. Inc. In addition, pursuant to the
terms of a registration rights agreement the former shareholders of Eldyne
and Unidyne whose shares have been registered pursuant to the shelf
registration statement described in the Registration Statement, have agreed
not to sell, contract to sell, grant an option to sell, transfer or
otherwise dispose of, directly or indirectly, any shares of Common Stock,
or securities convertible into or exchangeable for Common Stock or warrants
or other rights to purchase Common Stock for a period of 90 days from the
date of the Prospectus.
(t) Neither the Company nor any of the Subsidiaries has violated any
foreign, federal, state or local law or regulation relating to the
protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("Environmental
Laws"), nor any federal or state law relating to discrimination in the
hiring, promotion or pay of employees nor any applicable federal or state
wages and hours laws, nor any provisions of the Employee Retirement Income
Security Act or the rules and regulations promulgated thereunder, which in
each case might result in any material adverse effect on the properties,
assets, operations, business, business prospects or condition (financial or
other) of the Company and the Subsidiaries taken as a whole.
(u) The Company and each of the Subsidiaries has such permits,
licenses, franchises and authorizations of governmental or regulatory
authorities ("permits"), including without limitation under any applicable
Environmental Laws, as are necessary to own, lease and operate its
respective properties and to conduct its
9
business, except where the failure to obtain such permits, licenses,
franchises or authorizations would not result in any material adverse
effect on the properties, assets, operations, business, business prospects
or condition (financial or otherwise) of the Company and the Subsidiaries
taken as a whole; the Company and each of the Subsidiaries has fulfilled
and performed all of its material obligations with respect to such permits
and no event has occurred which allows, or after notice or lapse of time
would allow, revocation or termination thereof or results in any other
material impairment of the rights of the holder of any such permit; and,
except as described in the Prospectus, such permits contain no restrictions
that are materially burdensome to the Company or any of the Subsidiaries.
(v) The Company has reasonably concluded that the costs and
liabilities singly or in the aggregate (including without limitation any
capital or operating expenditure required for clean-up, closure of
properties or compliance with Environmental Laws or any permit, license or
approval, any related constraints on operating activities and any potential
liabilities to third parties) would not have a material adverse effect on
the properties, assets, operations, business, business prospects or
condition (financial or other) of the Company and the Subsidiaries taken as
a whole.
(w) Neither the Company nor any of the Subsidiaries, nor any employee
of the Company or any of the Subsidiaries, has made any payment of funds of
the Company or any of the Subsidiaries prohibited by law, and no funds of
the Company or any of the Subsidiaries have been set aside to be used for
any payment prohibited by law.
(x) The Company and the Subsidiaries have filed all federal or state
income or franchise tax returns required to be filed and have paid all
taxes shown thereon as due, and there is no material tax deficiency which
has been or might be asserted against the Company or any of the
Subsidiaries; all material tax liabilities are adequately provided for on
the books of the Company and the Subsidiaries.
(y) The Company has not incurred any liability for any finder's fees
or similar payments in connection with the transactions herein
contemplated.
(z) The Company and the Subsidiaries have good title to all
properties and assets owned or leased by
10
them, in each case free and clear of all liens, security interests,
pledges, charges, encumbrances, mortgages and defects (except such as are
described or referred to in the Prospectus or the financial statements and
the notes thereto contained therein or such as do not interfere with the
use made and proposed to be made of such property by the Company and the
Subsidiaries).
(aa) Neither the Company nor any of the Subsidiaries is an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended, or is subject to regulation under such Act.
4. CERTAIN COVENANTS OF THE COMPANY. The Company hereby agrees:
(a) to furnish such information as may be required and otherwise to
cooperate in qualifying the offering and sale of the Securities and, upon
conversion, the issuance of the Shares under the securities or blue sky
laws of such states as you may designate and to maintain such
qualifications in effect as long as required for the distribution of the
Securities and the Shares, provided that the Company shall not be required
to qualify as a foreign corporation or to consent to the service of process
under the laws of any such state (except service of process with respect to
the offering and sale of the Securities and the Shares); promptly to advise
you of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Securities or the Shares for sale in
any jurisdiction or the initiation or threatening of any proceeding for
such purpose; and to use its best efforts to obtain the withdrawal of any
order of suspension at the earliest practicable moment;
(b) to make available to you in New York City, as soon as practicable
after the Registration Statement becomes effective, and thereafter from
time to time to furnish to you, as many copies of the Prospectus (or of the
Prospectus as amended or supplemented if the Company shall have made any
amendment or supplement thereto after the effective date of the
Registration Statement) as you may request for the purposes contemplated by
the Act;
(c) to advise you promptly and if requested by you to confirm such
advice in writing (i) when the Registration Statement has become effective
and when any post-effective amendment thereto becomes effective
11
and (ii) when the Prospectus is filed with the Commission pursuant to Rule
424(b) under the Act, if required under the Act (which the Company agrees
to file in a timely manner under such Rule);
(d) to advise you promptly, confirming such advice in writing, of any
request by the Commission for amendments or supplements to the Registration
Statement or the Prospectus or for additional information with respect
thereto, or of notice of institution of proceedings for or the entry of a
stop order suspending the effectiveness of the Registration Statement and,
if the Commission should enter a stop order suspending the effectiveness of
the Registration Statement, to use its best efforts to obtain the lifting
or removal of such order as soon as possible; to advise you promptly of any
proposal to amend or supplement the Registration Statement or the
Prospectus, including by filing any document that would be incorporated
therein by reference and to file no such amendment or supplement to which
you shall object in writing;
(e) to furnish to you for a period of five years from the date of
this Agreement (i) copies of all reports or other communications that the
Company shall send to its shareholders or from time to time shall publish
or publicly disseminate and (ii) copies of all annual, quarterly and
current reports filed with the Commission on Forms 10-K, 10-Q and 8-K, or
such other similar form as may be designated by the Commission, and any
other document filed by the Company pursuant to Section 12, 13, 14 or 15(d)
of the Exchange Act;
(f) to advise you promptly of the happening of any event known to the
Company within the time during which a prospectus relating to the
Securities and the Shares is required to be delivered under the Act that,
in the reasonable judgment of the Company, would require the making of any
change in the Prospectus then being used, or in the information
incorporated therein by reference, so that the Prospectus, as then
supplemented, would not include an untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they are made, not misleading
and, during such time, promptly to prepare and furnish, at the Company's
expense, to you such amendments or supplements to such Prospectus as may be
necessary to reflect any such change in such quantities as requested by
you, and to furnish to you a copy of such proposed amendment or supplement
before filing any such amendment or supplement with the Commission;
12
(g) to make generally available to its security holders, including
holders of the Securities, and to deliver to you, an earnings statement of
the Company (which need not be audited and which will satisfy the
provisions of Section 11(a) of the Act including, at the option of the
Company, Rule 158) covering a period of 12 months beginning after the
effective date of the Registration Statement but ending not later than 15
months after the date of the Registration Statement, as soon as is
reasonably practicable after the termination of such 12-month period;
(h) to furnish to you two signed copies of the Registration
Statement, as initially filed with the Commission, and of all amendments
thereto (including all exhibits thereto and documents incorporated by
reference therein);
(i) to furnish to you as early as practicable prior to the time of
purchase and the additional time of purchase, as the case may be, but not
later than two business days prior thereto, a copy of the latest available
unaudited interim consolidated financial statements, if any, of the Company
and the Subsidiaries that have been read by the Company's independent
certified public accountants as stated in their letter to be furnished
pursuant to Section 6(c);
(j) to apply the net proceeds from the sale of the Securities in the
manner set forth under the caption "Use of Proceeds" in the Registration
Statement and the Prospectus;
(k) whether or not the transactions contemplated in this Agreement
are consummated or this Agreement otherwise becomes effective or is
terminated, to pay all expenses, fees and taxes (other than (x) any
transfer taxes and (y) fees and disbursements of your counsel except as set
forth in Section 5 and clauses (iii) and (iv) below) in connection with
(i) the preparation and filing of the Registration Statement, each
Preliminary Prospectus, the Prospectus and any amendment or supplement
thereto, and the printing and furnishing of copies of each thereof to you
and to dealers (including costs of mailing and shipment), (ii) the
issuance, sale and delivery of the Securities and the issuance and delivery
of the Shares upon conversion of the Securities, (iii) the word processing
or printing of the Indenture, this Agreement and any dealer agreements, and
the reproduction or printing and furnishing of copies of each thereof to
you and to dealers (including costs of mailing and
13
shipment), (iv) the qualification of the Securities and the Shares for
offering and sale under state laws as aforesaid and the determination of
the eligibility of the Securities for investment under state law (including
legal fees and filing fees and other disbursements of your counsel) and the
printing and furnishing of copies of any blue sky surveys or legal
investment surveys to you and to dealers, (v) any listing of the Securities
and the Shares on any securities exchange or qualification of the
Securities or the Shares for inclusion on the New York Stock Exchange and
any registration thereof under the Exchange Act, (vi) any filing for review
of the public offering of the Securities and the Shares by the NASD, (viii)
any fees payable to investment rating agencies with respect to the
Securities and (ix) the performance of the Company's other obligations
hereunder;
(l) not to sell, contract to sell, grant any option to sell, transfer
or otherwise dispose of, directly or indirectly, any shares of Common Stock
or securities convertible into or exchangeable for Common Stock or warrants
or other rights to purchase Common Stock or permit the registration under
the Act of any shares of Common Stock, except for the registration of the
Securities and the sales to you pursuant to this Agreement and except as
set forth on Schedule 4(1) hereto (and as described (or incorporated by
reference) in the Registration Statement), and except for issuances of
options or shares of Common Stock in accordance with any employee stock
option plans or any other employee benefit plans set forth on Schedule 4(1)
hereto (and described (or incorporated by reference) in the Registration
Statement)currently maintained by the Company, for a period commencing on
the date hereof and continuing for 180 days after the date of the
Prospectus, without the prior written consent of ▇▇▇▇▇▇, Read & Co. Inc.;
(m) to refrain from investing the proceeds from the sale of the
Securities in a manner to cause the Company or any of the Subsidiaries to
become an "investment company" within the meaning of the Investment Company
Act of 1940, as amended; and
(n) at any time that the number of authorized but unissued shares of
Common Stock (or shares of Common Stock held in treasury and available for
such purpose) shall be less than the aggregate number of shares of Common
Stock into which the Securities then outstanding shall be convertible, to
take such action as is necessary to increase the number of shares which the
14
Company is authorized to issue so that the Company will have a sufficient
number of shares of Common Stock available for conversion of the Securities
then outstanding.
5. REIMBURSEMENT OF UNDERWRITER'S EXPENSES. If the Firm Securities
or the Additional Securities are not delivered for any reason, other than the
failure of the Underwriter to purchase the Firm Securities or the Additional
Securities as provided herein (unless such failure is permitted under the
provisions of Section 6 or Section 7(b) of this Agreement), the Company will
reimburse the Underwriter for all of its out-of-pocket expenses, including the
fees and disbursements of its counsel.
6. CONDITIONS OF UNDERWRITER'S OBLIGATIONS. The obligations of the
Underwriter hereunder are subject to the accuracy of the representations and
warranties on the part of the Company on the date hereof and at the time of
purchase (and the obligations of the Underwriter at any additional time of
purchase are subject to the accuracy of the representations and warranties on
the part of the Company on the date hereof and at the time of purchase and at
such additional time of purchase, as the case may be), the performance by the
Company of its obligations hereunder and to the following conditions:
(a) The Company shall furnish to you at the time of purchase and at
such additional time of purchase, as the case may be, an opinion of ▇▇▇▇▇▇
& ▇▇▇▇▇▇▇, counsel for the Company, addressed to the Underwriter and dated
the time of purchase or such additional time of purchase, as the case may
be, and in form satisfactory to ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel for
the Underwriter, stating that:
(i) 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 full corporate power and authority (A) to own its
properties and conduct its business as described in the Registration
Statement and the Prospectus and (B) to execute and deliver this
Agreement and the Indenture and to issue, sell and deliver the
Securities as herein contemplated and, upon conversion of the
Securities, to issue and deliver the Shares;
(ii) each of the Subsidiaries has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
the state in which such Subsidiary is incorporated,
15
with full corporate power and authority to own its properties and to
conduct its business to the extent described in the Registration
Statement and the Prospectus;
(iii) each of the Company and each of the Subsidiaries is duly
qualified or licensed to do business by and is in good standing as a
foreign corporation in the jurisdictions set forth on Schedule
6(a)(iii) hereto;
(iv) Except for 18% of the outstanding shares of capital stock of
Tomotherapeutics, Inc., all of the issued and outstanding shares of
capital stock of each Subsidiary have been duly authorized and validly
issued and are fully paid and nonassessable and, except as set forth
in the Prospectus, are owned, directly or indirectly, by the Company
free and clear of any pledge, lien, encumbrance, security interest,
preemptive right or other claim, and except as set forth on Schedule
3(d) hereto, there are no rights, warrants, options or other
agreements to acquire or instruments convertible into or exchangeable
for any shares of capital stock or other equity interest of any
Subsidiary, except as set forth in the Prospectus;
(v) this Agreement has been duly authorized, executed and
delivered by the Company;
(vi) the Indenture has been duly authorized, executed and
delivered by the Company and (assuming due authorization, execution
and delivery by the trustee thereunder) is the legally valid and
binding agreement of the Company enforceable in accordance with its
terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or affecting creditors' rights generally and general
principles of equity;
(vii) (a) the Securities have been duly authorized, executed and
delivered by the Company, and, when executed and authenticated in
accordance with the terms of the Indenture and delivered to and paid
for by the Underwriter as contemplated hereby, will constitute legally
valid and binding obligations of the Company enforceable in accordance
with their terms, except as the enforceability thereof may be limited
by
16
bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or affecting creditors' rights generally and general
principles of equity; (b) the global certificate for the Securities
issued to the DTC is in due and proper form in accordance with the
terms of the Indenture; and (c) the Securities are convertible into
Common Stock of the Company in accordance with the terms of the
Indenture;
(viii) the Shares have been duly authorized and validly reserved
for issuance upon conversion of the Securities, are sufficient in
number to meet the requirements set forth in the Indenture for
conversion of the Securities at the date of issuance of the Securities
and, when issued and delivered upon such conversion, will be fully
paid and nonassessable and, assuming the holders of the Securities
have no notice of any adverse claim with respect to the Shares, such
holders will acquire the Shares free of adverse claims;
(ix) the Company has authorized capital stock as set forth under
the heading "Capitalization" in the Registration Statement and the
Prospectus and (b) the outstanding shares of capital stock of the
Company have been duly authorized and validly issued, and, based on
our knowledge of the facts set forth in an officer's certificate, are
fully paid, nonassessable and free of statutory and contractual
preemptive rights;
(x) (a) the Securities and the Indenture conform in all material
respects to the description thereof contained in the Registration
Statement and Prospectus; and (b) the capital stock of the Company,
including the Shares, conforms in all material respects to the
description thereof contained in the Registration Statement and the
Prospectus;
(xi) the Registration Statement and the Prospectus (except as to
the financial statements and schedules contained or incorporated by
reference therein and the Trustee's Statement of Eligibility and
Qualification on Form T-1 as to which such counsel need express no
opinion)
17
comply as to form in all material respects with the requirements for
registration statements on Form S-3 under the Act and the Trust
Indenture Act; provided, however, that such counsel need express no
opinion pursuant to this paragraph as to the accuracy, completeness or
fairness of the statements made in the Registration Statement or
Prospectus;
(xii) the Registration Statement has become effective under the
Act and, to the best of such counsel's knowledge, no stop order
proceedings with respect thereto are pending or threatened under the
Act;
(xiii) the Indenture has been qualified under the Trust Indenture
Act;
(xiv) no approval, authorization, consent or order of or filing
with any governmental or regulatory commission, board, body, authority
or agency is required in connection with the issuance or sale of the
Securities as contemplated hereby or in connection with the issuance
of the Shares upon conversion of the Securities, other than
registration of the Securities and the Shares under the Act and
qualification of the Indenture under the Trust Indenture Act (except
such counsel need express no opinion as to any necessary qualification
under the state securities or blue sky laws of the various
jurisdictions in which the Securities are being offered by the
Underwriter);
(xv) The execution, delivery and performance of this Agreement
and the Indenture by the Company, the issuance and sale of the
Securities, the application of the net proceeds thereof as described
in the Prospectus, the issuance of the Shares upon conversion of the
Securities and the consummation by the Company of the transactions
contemplated hereby and thereby do not and will not conflict with, or
result in any breach of, or constitute a default under (nor constitute
any event which with notice, lapse of time or both would constitute a
breach of or default under), the charter or bylaws of the Company or
any of the Subsidiaries, or any provision of any agreement for
borrowed money under which the Company is obligated and of which such
counsel has knowledge, or other contract or agreement filed as an
exhibit to the Registration Statement or any exhibit
18
incorporated by reference therein, or under any law, regulation or
rule applicable to the Company or any of the Subsidiaries, or any
decree, judgment or order applicable to the Company or any of the
Subsidiaries and of which such counsel has knowledge;
(xvi) all contracts or documents of which such counsel has
knowledge and which are of a
19
character required to be described in the Registration Statement or
the Prospectus or to be filed as an exhibit to the Registration
Statement have been so described or filed;
(xvii) the documents incorporated by reference in the Registration
Statement and Prospectus, when they were filed (or, if an amendment
with respect to any such document was filed, when such amendment was
filed), comply as to form in all material respects with the Exchange
Act (except as to the financial statements and schedules and other
financial and statistical data contained or incorporated by reference
therein, as to which such counsel need express no opinion); provided,
however, that such counsel need express no opinion pursuant to this
paragraph as to the accuracy, completeness or fairness of the
statements made in the documents incorporated by reference in the
Registration Statement or Prospectus;
(xviii) to the best of such counsel's knowledge, no person has the
right, contractual or otherwise, to cause the Company to issue to it,
or register pursuant to the Act, any securities of the Company in
consequence of the issue and sale of the Securities to the Underwriter
hereunder or the issuance of the Shares upon conversion of the
Securities;
(xix) the statements in the Registration Statement and the
Prospectus under the captions "Description of Debentures" and
"Description of Capital Stock", insofar as such statements constitute
a summary of legal matters, are accurate in all material respects; and
20
(xx) neither the Company nor any of the Subsidiaries is an
"investment company" or a person "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended.
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the independent
public accountants for the Company, and the Underwriter's
representatives, at which the contents of the Registration Statement
and the Prospectus and related matters were discussed and, although
such counsel is not passing upon, and does not assume any
responsibility for, the accuracy, completeness or fairness of the
statements contained in the Registration Statement and the Prospectus,
during the course of such participation, no facts came to such
counsel's attention that caused them to believe that the Registration
Statement, at the time it became effective, contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or that the Prospectus (including the
documents incorporated by reference therein), as of the date hereof,
contained an untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading; it being
understood that such counsel need express no belief with respect to
the financial statements and schedules and other financial and
statistical data included in the Registration Statement or the
Prospectus or incorporated by reference therein or with respect to the
Form T-1.
(b) The Company shall furnish to you at the time of purchase and at
such additional time of purchase, as the case may be, an opinion of
____________, [Title] of the Company, addressed to the Underwriter and
dated the time of purchase or such additional time of purchase, as the case
may be, and in form satisfactory to ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel
for the Underwriter, stating that:
(i) to the best of such counsel's knowledge, neither the Company
nor any of the Subsidiaries is in breach of or in default under (nor
has any event occurred which with notice, lapse of time or
21
both would constitute a breach of or default under) any material
license, indenture, lease, mortgage, deed of trust, bank loan or
credit agreement or any other agreement or instrument to which the
Company or any of the Subsidiaries is a party or by which the Company
or any of the Subsidiaries or their properties are bound or affected
or under any law, regulation or rule or any decree, judgment or order
applicable to the Company or any of the Subsidiaries, except for such
matters as could not reasonably be expected, individually or in the
aggregate, to have a material adverse effect on the properties,
assets, operations, business, business prospects or condition
(financial or other) of the Company and the Subsidiaries taken as a
whole; and
(ii) to the best of such counsel's knowledge, the Company and
each of the Subsidiaries has such permits, licenses, franchises and
authorizations of governmental or regulatory authorities ("permits"),
including without limitation under any applicable Environmental Laws,
as are necessary to own, lease and operate its respective properties
and to conduct its business in the manner described in the Prospectus;
to the best of such counsel's knowledge, after due inquiry, the
Company and each of the Subsidiaries has fulfilled and performed all
of its material obligations with respect to such permits and no event
has occurred which allows, or after notice or lapse of time would
allow, revocation or termination thereof or results in any other
material impairment of the rights of the holder of any such permit,
subject in each case to such qualification as may be set forth in the
Prospectus; and, except as described in the Prospectus, such permits
contain no restrictions that, to the knowledge of such counsel, are
materially burdensome to the Company or any of the Subsidiaries;
(iii) except as described in the Registration Statement and the
Prospectus, there are no actions, suits or proceedings, to the best of
such counsel's knowledge, pending or threatened against the Company or
any of the Subsidiaries, or any of their respective properties, at law
or in equity, or before or by any federal, state, local or foreign
governmental or regulatory commission, board, body, authority or
agency that individually or in the aggregate could reasonably be
expected to result in a judgment, decree or order having a
22
material adverse effect on the properties, assets, operations,
business, business prospects or condition (financial or other) of the
Company and the Subsidiaries taken as a whole.
(c) You shall have received from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP customary
letters dated, respectively, the date of this Agreement and the time of
purchase and additional time of purchase, as the case may be, with respect
to the financial statements and certain financial information contained in
or incorporated by reference in the Registration Statement and the
Prospectus and addressed to the you in form and substance satisfactory to
you.
(d) You shall have received at the time of purchase and at the
additional time of purchase, as the case may be, opinions from ▇▇▇▇▇▇, ▇▇▇▇
& ▇▇▇▇▇▇▇▇ LLP in form and substance satisfactory to you.
(e) No amendment or supplement to the Registration Statement or the
Prospectus, including documents deemed to be incorporated by reference
therein, shall be filed prior to the time the Registration Statement
becomes effective to which you shall have objected in writing.
(f) The Registration Statement shall become effective at or before
5:00 P.M., New York City time, on the date of this Agreement and, if
Rule 430A under the Act is used, the Prospectus shall have been filed with
the Commission pursuant to Rule 424(b) under the Act at or before
5:00 P.M., New York City time, on the second full business day after the
date of this Agreement; PROVIDED, HOWEVER, that the Company and you from
time to time may agree in writing or by telephone, confirmed in writing, on
a later date.
(g) Prior to the time of purchase or the additional time of purchase,
as the case may be: (i) no stop order with respect to the effectiveness of
the Registration Statement shall have been issued under the Act or
proceedings initiated under Section 8(d) or 8(e) of the Act; (ii) the
Registration Statement and all amendments thereto, or modifications
thereof, if any, shall 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 not misleading; and (iii) the
Prospectus and all amendments or supplements thereto, or modifications
thereof, if any, shall not contain an untrue statement of a material
fact or omit to state a
23
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading.
(h) Between the time of execution of this Agreement and the time of
purchase or the additional time of purchase, as the case may be, there has
not been: (i) any material and adverse change, present or prospective, in
the properties, assets, operations, business, business prospects or
condition (financial or other) of the Company and the Subsidiaries taken as
a whole, other than as described in the Registration Statement and the
Prospectus; (ii) any transaction that is material to the Company and the
Subsidiaries taken as a whole contemplated or entered into by the Company
or any of the Subsidiaries, other than as described in the Registration
Statement and the Prospectus; or (iii) any obligation, contingent or
otherwise, directly or indirectly, incurred by the Company or any of the
Subsidiaries that is material to the Company and the Subsidiaries taken as
a whole, other than as described in the Registration Statement and the
Prospectus.
(i) The Company, at the time of purchase or additional time of
purchase, as the case may be, will deliver to you a certificate of two of
its executive officers to the effect that the representations and
warranties of the Company as set forth in this Agreement are true and
correct as of each such date and the conditions set forth in Section 6(g)
and Section 6(h) have been met.
(j) You shall have received a signed letter, dated the date of this
Agreement, from each of the officers and directors listed in Schedule A to
the effect that such persons shall not sell, contract to sell, grant any
option to sell, transfer or otherwise dispose of, directly or indirectly,
any shares of Common Stock or securities convertible into or exchangeable
for Common Stock or warrants or other rights to purchase Common Stock for a
period of 180 days from the date of the Prospectus without the prior
written consent of ▇▇▇▇▇▇, Read & Co. Inc.
(k) The Company shall have furnished to you such other documents and
certificates as to the accuracy and completeness of any statement in the
Registration Statement or the Prospectus as of the time of purchase and the
additional time of purchase, as the case may be, as you reasonably may
request.
24
(l) The Company shall have performed such of its obligations under
this Agreement as are to be performed by the terms hereof at or before the
time of purchase and at or before the additional time of purchase, as the
case may be.
(m) Between the time of execution of this Agreement and the time of
purchase or the additional time of purchase, as the case may be, there
shall not have occurred any downgrading, nor shall any notice have been
given of (i) any intended or potential downgrading or (ii) any review or
possible change that does not indicate an improvement or maintenance in the
rating accorded any rated securities of the Company, including, if rated,
the Securities, by any "nationally recognized statistical rating
organization", as that term is defined in Rule 436(g)(2) under the Act.
7. EFFECTIVE DATE OF AGREEMENT; TERMINATION.
(a) This Agreement shall become effective (i) if Rule 430A under the
Act is not used, when you shall have received notification of the
effectiveness of the Registration Statement, or (ii) if Rule 430A under the
Act is used, when the parties hereto have executed and delivered this
Agreement.
(b) The obligations of the Underwriter hereunder shall be subject to
termination in your absolute discretion if, at any time prior to the time
of purchase or, with respect to the purchase of any Additional Securities,
the additional time of purchase, as the case may be, trading in securities
on the New York Stock Exchange shall have been suspended or minimum prices
shall have been established on the New York Stock Exchange or if a banking
moratorium shall have been declared either by the United States or New York
State authorities, or if the United States shall have declared war in
accordance with its constitutional processes or there shall have occurred
any material outbreak or escalation of hostilities or other national or
international calamity or crisis of such magnitude in its effect on, or any
material adverse change in, any financial market which, in each case, in
your judgment, makes it impracticable to market the Securities. If you
elect to terminate this Agreement as provided in this Section 7(b), the
Company shall be notified promptly by letter or telegram.
(c) If the purchase of the Securities by the Underwriter, as
contemplated by this Agreement, is not consummated for any reason permitted
under this
25
Agreement or if such purchase is not consummated because the Company shall
be unable to comply with any of the terms of this Agreement, the Company
shall not be under any obligation or liability under this Agreement (except
to the extent provided in Sections 4(k), 5 and 8), and the Underwriter
shall be under no obligation or liability to the Company under this
Agreement (except to the extent provided in Section 8).
8. INDEMNITY BY THE COMPANY AND THE UNDERWRITER.
(a) The Company agrees to indemnify, defend and hold harmless the
Underwriter, each person that controls the Underwriter within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act, and the
Underwriter's agents, employees, officers and directors and the agents,
employees, officers and directors of any such controlling person
(collectively, the "Underwriter indemnified parties") from and against any
and all losses, claims, damages, judgments, ▇▇▇▇▇▇▇▇▇▇▇ and expenses
(including the fees and expenses of counsel and other expenses in
connection with investigating, defending or settling any such action or
claim) which, jointly or severally, any Underwriter indemnified party may
incur as they are incurred (and regardless of whether such Underwriter
indemnified party is a party to the litigation, if any) arising out of or
based upon any untrue statement or alleged untrue statement of a material
fact contained in the registration statement relating to the Securities or
the Prospectus or any Preliminary Prospectus, or arising out of or based
upon any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein
not misleading, except insofar as such losses, claims, damages, judgments,
liabilities or expenses arise out of, or are based upon, any such untrue
statement or omission or alleged untrue statement or omission based upon
and in conformity with information with respect to the Underwriter
furnished in writing by the Underwriter to the Company expressly for use
therein with reference to the Underwriter. This indemnity agreement will
be in addition to any liability the Company otherwise may have.
(b) If any action or proceeding (including any governmental or
regulatory investigation or proceeding) shall be brought or asserted
against any Underwriter indemnified party, with respect to which indemnity
may be sought against the Company pursuant to this
26
Section 8, such Underwriter indemnified party shall promptly notify the
Company in writing, and the Company shall assume the defense thereof,
including the employment of counsel reasonably satisfactory to the
Underwriter indemnified party and payment of all fees and expenses;
provided that the omission so to notify the Company shall not relieve it
from any liability that it may have to any Underwriter indemnified party.
An Underwriter indemnified party shall have the right to employ separate
counsel in any such action or proceeding and to assume the defense thereof,
but the fees and expenses of such counsel shall be at the expense of such
Underwriter indemnified party unless (i) the employment of such counsel has
been authorized in writing by the Company, (ii) the Company has failed
promptly to assume the defense and employ counsel reasonably satisfactory
to the Underwriter indemnified party or (iii) the named parties to any such
action or proceeding (including any impleaded parties) include both the
Underwriter indemnified party and the Company and such Underwriter
indemnified party shall have reasonably concluded that there may be one or
more legal defenses available to it that are different from or additional
to those available to the Company (in which case the Company shall not have
the right to assume the defense of such action on behalf of such
Underwriter indemnified party), in any of which events such fees and
expenses shall be borne by the Company and reimbursed as they are incurred.
It is understood, however, that the Company shall not, in connection with
any one such action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the fees and expenses of more
than one separate firm of attorneys (in addition to any local counsel) at
any time for all such Underwriter indemnified parties, which firm shall be
designated in writing by ▇▇▇▇▇▇, Read & Co. Inc., and that all such fees
and expenses shall be reimbursed as they are incurred. The Company shall
not be liable for any settlement of any such action effected without the
written consent of the Company (which consent shall not be unreasonably
withheld or delayed), but if settled with the written consent of the
Company, or if there is a final judgment with respect thereto, the Company
agrees to indemnify and hold harmless each Underwriter indemnified party
from and against any loss or liability by reason of such settlement or
judgment.
(c) The Underwriter agrees to indemnify and hold harmless the
Company, its directors, its officers who sign the Registration Statement,
and any person that
27
controls the Company within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act (collectively, the "Company indemnified
parties") to the same extent as the foregoing indemnity from the Company to
the Underwriter indemnified parties, but only with respect to information
concerning the Underwriter furnished in writing by or on behalf of the
Underwriter to the Company expressly for use with respect to the
Underwriter in the Registration Statement, any Preliminary Prospectus or
the Prospectus. In case any action shall be brought against any Company
indemnified party based on the Registration Statement, any Preliminary
Prospectus or the Prospectus and in respect of which indemnity may be
sought against the Underwriter pursuant to this Section 8(c), the
Underwriter shall have the rights and duties given to the Company by
Section 8(b) (except that if the Company shall have assumed the defense
thereof the Underwriter shall not be required to do so, but may employ
separate counsel therein and participate in the defense thereof, PROVIDED
that the fees and expenses of such separate counsel shall be at the expense
of the Underwriter), and the Company indemnified parties shall have the
rights and duties given to the Underwriter indemnified parties by
Section 8(b).
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless any Underwriter indemnified
party or any Company indemnified party, then the party required to
indemnify such indemnified party under this Section 8, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims,
damages, judgments, liabilities and expenses (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the
one hand and the Underwriter on the other hand from the offering of the
Securities, or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company on the one hand and the Underwriter
on the other hand in connection with the statements or omissions which
resulted in such losses, claims, damages, liabilities or expenses, as well
as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriter on the other
hand shall be deemed to be in the same proportion as the total proceeds
from the
28
offering (net of underwriting discounts and commissions but before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriter, in each case as set
forth in the table on the cover page of the Prospectus. The relative fault
of the Company on the one hand and the Underwriter on the other hand shall
be determined by reference to, among other things, whether the untrue
statement 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 by the Underwriter and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The amount paid or payable by a party as a result
of the losses, claims, damages, judgments, liabilities and expenses
referred to above shall be deemed to include any legal or other fees or
expenses reasonably incurred by such party in connection with investigating
or defending any claim or action.
The Company and the Underwriter agree that it would not be just and
equitable if contribution pursuant to this Section 8(d) were determined by
pro rata allocation or by any other method of allocation that does not
take account of the equitable considerations referred to in this
Section 8(d). Notwithstanding the provisions of this Section 8(d), no
Underwriter indemnified party shall be required to contribute any amount in
excess of the amount by which the total price at which the Securities
underwritten by such Underwriter indemnified party and distributed to the
public were offered to the public exceeds the amount of any damages which
such Underwriter indemnified party otherwise has been required to pay by
reason of such untrue statement 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 statements under the caption "Underwriting" in the Prospectus (to
the extent such statements relate to the Underwriter) constitute the only
information furnished to the Company in writing by the Underwriter
expressly for use in the Registration Statement, any Preliminary Prospectus
or the Prospectus.
(e) The indemnity and contribution agreements contained in this
Section 8 and the representations, warranties and covenants of the Company
contained in
29
this Agreement shall remain in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter indemnified party or
by or on behalf of any Company indemnified party, and shall survive any
termination of this Agreement or the issuance and delivery of the
Securities. Subject to the provisions of Section 8(b) and Section 8(c),
the Company and the Underwriter agree promptly to notify the other of the
commencement of any litigation or proceeding against it in connection with
the issuance and sale of the Securities or in connection with the
Registration Statement or the Prospectus.
9. NOTICES. Except as otherwise herein provided, all statements,
requests, notices and agreements shall be in writing or by telegram and, if to
the Underwriter, shall be sufficient in all respects if delivered or sent to
▇▇▇▇▇▇, Read & Co. Inc., ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Syndicate Department; and if to the Company, shall be sufficient in
all respects if delivered or sent to the Company at the offices of the Company
at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate
Secretary.
10. CONSTRUCTION. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW. THE SECTION HEADINGS IN THIS AGREEMENT HAVE
BEEN INSERTED AS A MATTER OF CONVENIENCE OF REFERENCE AND ARE NOT A PART OF THIS
AGREEMENT.
11. PARTIES AT INTEREST. The Agreement herein set forth has been and
is made solely for the benefit of the Underwriter, the Company, the Underwriter
indemnified parties and the Company indemnified parties, and their respective
successors, assigns, executors and administrators. No other person,
partnership, association or corporation (including a purchaser, as such
purchaser, from the Underwriter) shall acquire or have any right under or by
virtue of this Agreement.
12. COUNTERPARTS. This Agreement may be signed by the parties in
counterparts which together shall constitute one and the same agreement among
the parties.
If the foregoing correctly sets forth the understanding between the
Company and the Underwriter, please so indicate in the space provided below for
such purpose, whereupon this letter and your acceptance shall constitute a
binding agreement between the Company and the Underwriter.
30
Very truly yours,
THE TITAN CORPORATION
By:
-------------------------
Name:
Title:
Accepted and agreed to as of
the date first above written
▇▇▇▇▇▇, READ & CO. INC., as
sole Underwriter
By:
---------------------------
Name:
Title:
31
SCHEDULE A
OFFICERS AND DIRECTORS WHO HAVE EXECUTED LOCK-UP AGREEMENTS
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A-1
