K&S DRAFT: 10/31/96
4,000,000 SHARES
DIGITAL LIGHTWAVE, INC.
COMMON STOCK,
$.0001 PAR VALUE
UNDERWRITING AGREEMENT
__________, 1996
CS FIRST BOSTON CORPORATION
As Representative of the Several Underwriters
Xxxx Xxxxxx Xxxxx
Xxx Xxxx, X.X. 00000
Dear Sirs:
1. INTRODUCTORY. Digital Lightwave, Inc., a Delaware corporation (the
"Company"), proposes to issue and sell to the several Underwriters named in
Schedule A hereto (the "Underwriters") 3,140,000 shares of its Common Stock,
$.0001 par value per share (the "Securities") and the stockholders listed in
Schedule B hereto (the "Selling Stockholders") propose severally and not jointly
to sell an aggregate of 860,000 outstanding shares of the Securities (such
4,000,000 shares of Securities being hereinafter referred to as the "Firm
Securities"). The Company also proposes to sell to the Underwriters, at the
option of the Underwriters, an aggregate of not more than 600,000 additional
shares of its Securities, as set forth below (such 600,000 additional shares
being hereinafter referred to as the "Optional Securities"). The Firm Securities
and the Optional Securities are herein collectively referred to as the "Offered
Securities." This Underwriting Agreement, as amended, supplemented or modified
from time to time is referred to herein as the "Agreement." The Company and the
Selling Stockholders hereby agree with the Underwriters as follows:
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SELLING
STOCKHOLDERS. (a) The Company represents and warrants to, and agrees with, the
several Underwriters that:
(i) A registration statement on Form S-1 (No. 333-9457) relating to
the Offered Securities, including a form of prospectus, has been filed with
the Securities and Exchange Commission (the "Commission") and either
(A) has been declared effective under the Securities Act of 1933, as
amended (the "Act"), and is not proposed to be amended or (B) is proposed
to be amended by amendment or post-effective amendment. If such
registration statement (the "initial registration statement") has been
declared effective, either (A) an additional registration statement (the
"additional registration statement") relating to the Offered Securities may
have been filed with the Commission pursuant to Rule 462(b) ("Rule 462(b)")
under the Act and, if so filed, has become effective upon filing pursuant
to such Rule and the Offered Securities all have been duly
registered under the Act pursuant to the initial registration statement
and, if applicable, the additional registration statement or (B) such an
additional registration statement is proposed to be filed with the
Commission pursuant to Rule 462(b) and will become effective upon filing
pursuant to such Rule and upon such filing the Offered Securities will all
have been duly registered under the Act pursuant to the initial
registration statement and such additional registration statement. If the
Company does not propose to amend the initial registration statement or if
an additional registration statement has been filed and the Company does
not propose to amend it, and if any post-effective amendment to either such
registration statement has been filed with the Commission prior to the
execution and delivery of this Agreement, the most recent amendment (if
any) to each such registration statement has been declared effective by the
Commission or has become effective upon filing pursuant to Rule 462(c)
("Rule 462(c)") under the Act or, in the case of the additional
registration statement, Rule 462(b). For purposes of this Agreement,
"Effective Time" with respect to the initial registration statement or, if
filed prior to the execution and delivery of this Agreement, the additional
registration statement means (A) if the Company has advised the
Representatives that it does not propose to amend such registration
statement, the date and time as of which such registration statement, or
the most recent post-effective amendment thereto (if any) filed prior to
the execution and delivery of this Agreement, was declared effective by the
Commission or has become effective upon filing pursuant to Rule 462(c), or
(B) if the Company has advised the Representatives that it proposes to file
an amendment or post-effective amendment to such registration statement,
the date and time as of which such registration statement, as amended by
such amendment or post-effective amendment, as the case may be, is declared
effective by the Commission. If an additional registration statement has
not been filed prior to the execution and delivery of this Agreement but
the Company has advised the Representatives that it proposes to file one,
"Effective Time" with respect to such additional registration statement
means the date and time as of which such registration statement is filed
and becomes effective pursuant to Rule 462(b). "Effective Date" with
respect to the initial registration statement or the additional
registration statement (if any) means the date of the Effective Time
thereof. The initial registration statement, as amended at its Effective
Time, including all information contained in the additional registration
statement (if any) and deemed to be a part of the initial registration
statement as of the Effective Time of the additional registration statement
pursuant to the General Instructions of the Form on which it is filed and
including all information (if any) deemed to be a part of the initial
registration statement as of its Effective Time pursuant to Rule 430A(b)
("Rule 430A(b)") under the Act, is hereinafter referred to as the "Initial
Registration Statement". The additional registration statement, as amended
at its Effective Time, including the contents of the initial registration
statement incorporated by reference therein and including all information
(if any) deemed to be a part of the additional registration statement as of
its Effective Time pursuant to Rule 430A(b), is hereinafter referred to as
the "Additional Registration Statement". The Initial Registration
Statement and the Additional Registration Statement are hereinafter
referred to collectively as the "Registration Statements" and individually
as a "Registration Statement". The form of prospectus relating to the
Offered Securities, as first filed with the Commission pursuant to and in
accordance with Rule 424(b) ("Rule 424(b)") under the Act or (if no such
filing is required) as included in a Registration Statement, is hereinafter
referred to as the "Prospectus". No document has been or will be prepared
or distributed in reliance on Rule 434 under the Act.
(ii) If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement: (A) on the Effective
Date of the Initial Registration Statement, the Initial Registration
Statement conformed in all material respects to the requirements of the Act
and the rules and regulations of the Commission ("Rules and Regulations")
and did not include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or
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necessary to make the statements therein not misleading, (B) on the
Effective Date of the Additional Registration Statement (if any), each
Registration Statement conformed, or will conform, in all material respects
to the requirements of the Act and the Rules and Regulations and did not
include, or will not include, any untrue statement of a material fact and
did not omit, or will not omit, to state any material fact required to be
stated therein or necessary to make the statements therein not misleading,
and (C) on the date of this Agreement, the Initial Registration Statement
and, if the Effective Time of the Additional Registration Statement is
prior to the execution and delivery of this Agreement, the Additional
Registration Statement each conforms, and at the time of filing of the
Prospectus pursuant to Rule 424(b) or (if no such filing is required) at
the Effective Date of the Additional Registration Statement in which the
Prospectus is included, each Registration Statement and the Prospectus will
conform, in all material respects to the requirements of the Act and the
Rules and Regulations, and none of such documents includes, or will
include, any untrue statement of a material fact or omits, or will omit, to
state any material fact required to be stated therein or necessary to make
the statements therein (and, in the case of the Prospectus, in light of the
circumstances under which they were made) not misleading. If the Effective
Time of the Initial Registration Statement is subsequent to the execution
and delivery of this Agreement: on the Effective Date of the Initial
Registration Statement, the Initial Registration Statement and the
Prospectus will conform in all material respects to the requirements of the
Act and the Rules and Regulations, neither of such documents will include
any untrue statement of a material fact or will omit to state any material
fact required to be stated therein or necessary to make the statements
therein (and, in the case of the Prospectus, in light of the circumstances
under which such statements were made) not misleading, and no Additional
Registration Statement has been or will be filed. The two preceding
sentences do not apply to statements in or omissions from a Registration
Statement or the Prospectus (or any supplements thereto) based upon written
information furnished to the Company by any Underwriter through the
Representatives specifically for use therein, it being understood and
agreed that the only such information is that described as such in Section
7(c).
(iii) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware, with
power and authority (corporate and other) to own its properties and conduct
its business as described in the Prospectus; and the Company is duly
qualified to do business as a foreign corporation in good standing in all
other jurisdictions in which its ownership or lease of property or the
conduct of its business requires such qualification, except where the
failure, individually or in the aggregate, to be so qualified would not
have a material adverse effect upon the condition, financial or otherwise,
results of operations, business affairs or business prospects of the
Company.
(iv) The Company has no subsidiaries and owns no securities, directly
or indirectly, of any entity.
(v) The Company's authorized capitalization is as described in the
Prospectus; all outstanding shares of capital stock of the Company have
been duly authorized and are validly issued, fully paid and nonassessable
and conform to the description thereof contained in the Prospectus; the
Offered Securities have been duly authorized and, when issued and delivered
against payment therefor as provided herein, will be validly issued, fully
paid and nonassessable and conform to the description thereof contained in
the Prospectus; the stockholders of the Company have no preemptive rights
with respect to the Securities; except as described in the Prospectus,
there are no other rights to subscribe for or purchase any shares of
capital stock issued by the Company; and, except as described in the
Prospectus, there are no outstanding securities or
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obligations of the Company convertible into, exercisable for or
exchangeable for any capital stock of the Company.
(vi) Except as disclosed in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person that would
give rise to a valid claim against the Company or any Underwriter for a
brokerage commission, finder's fee or other like payment in connection with
the transactions contemplated hereby.
(vii) No person or entity has any right, not effectively satisfied or
waived, to require the Company to include any securities with the
Securities registered pursuant to a Registration Statement; no person or
entity has any right to require the Company to file a registration
statement under the Act with respect to any securities of the Company owned
or to be owned by such person; and, except as described in the Prospectus,
no person or entity has any right to require the Company to include such
securities with securities to be registered pursuant to any other
registration statement filed by the Company under the Act.
(viii) The Offered Securities have been approved for listing on the
Nasdaq Stock Market's National Market, subject to notice of issuance.
(ix) No consent, approval, authorization, or order of, or filing with,
any governmental agency or body or any court is required to be obtained or
made by the Company for the consummation of the transactions contemplated
by this Agreement in connection with the sale of the Offered Securities by
the Company, except such as have been obtained and made for registration of
the Offered Securities under the Act and such as may be required by the
National Association of Securities Dealers, Inc. or under state or foreign
securities laws.
(x) The execution, delivery and performance of this Agreement and the
sale of the Offered Securities by the Company will not result in a breach
or violation of any of the terms and provisions of the charter or bylaws of
the Company. The execution, delivery and performance of this Agreement and
the sale of the Offered Securities by the Company will not result in a
breach or violation of any of the terms and provisions of, or constitute a
default under, any statute, any rule, regulation or order of any
governmental agency or body or any court having jurisdiction over the
Company or any of its properties, or any agreement or instrument to which
the Company is a party or by which the Company is bound or to which any of
the properties of the Company is subject, which breach violation or default
would, individually or in the aggregate have a material adverse effect on
the Company.
(xi) This Agreement has been duly authorized, executed and delivered
by the Company.
(xii) Except as disclosed in the Prospectus, the Company has good and
marketable title to all real properties and all other properties and assets
owned by it, in each case free from liens, encumbrances and defects that
would materially affect the value thereof or materially interfere with the
use made or to be made thereof; and except as disclosed in the Prospectus,
the Company holds any leased real or personal property under valid and
enforceable leases with no exceptions that would materially interfere with
the use made or to be made thereof.
(xiii) The Company possesses adequate certificates, authorities or
permits issued by appropriate governmental agencies or bodies necessary to
conduct the business now operated by it as described in the Prospectus,
except for certificates, authorities or permits that are not material
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and do not interfere with the conduct of the business of the Company; and
the Company has not received any notice of proceedings relating to the
revocation or modification of any such certificate, authority or permit
that, if determined adversely to the Company, would individually or in the
aggregate have a material adverse effect on the Company.
(xiv) No labor dispute with the employees of the Company exists or, to
the knowledge of the Company, is imminent that might have a material
adverse effect on the Company; the Company is not engaged in any unfair
labor practice; and no unfair labor practice complaint is pending or, to
its best knowledge, threatened against the Company.
(xv) Except as disclosed in the Prospectus, the Company owns
trademarks, trade names and other rights to inventions, know-how, patents,
patent applications, copyrights, confidential information and other
intellectual property (collectively, "intellectual property rights")
necessary to operate its business as now conducted by it and as proposed to
be conducted, each as described in the Prospectus; to the best knowledge of
the Company, the Company has not infringed, and is not infringing, and the
Company has not received any notice of claimed infringement with respect
to, any intellectual property rights of others; and to the best knowledge
of the Company there is no infringement by others of the intellectual
property rights of the Company.
(xvi) Except as disclosed in the Prospectus, there are no pending
actions, suits or proceedings against or affecting the Company or any of
its properties that, if determined adversely to the Company, would
individually or in the aggregate have a material adverse effect on the
condition (financial or otherwise), business, properties or results of
operations of the Company, or would materially and adversely affect the
ability of the Company to perform its obligations under this Agreement, or
which are otherwise material in the context of the sale of the Offered
Securities; and no such actions, suits or proceedings are, to the Company's
knowledge, threatened or contemplated.
(xvii) The financial statements included in each Registration
Statement and the Prospectus present fairly the financial position of the
Company as of the dates shown and its results of operations and cash flows
for the periods shown, and such financial statements have been prepared in
conformity with the generally accepted accounting principles in the United
States applied on a consistent basis.
(xviii) Except as disclosed in the Prospectus, since the date of the
latest audited financial statements included in the Prospectus there has
been no material adverse change, nor any development or event that may
result in a prospective material adverse change, in the condition
(financial or otherwise), business, properties or results of operations of
the Company; there have been no transactions entered into by the Company,
other than in the ordinary course of business, which are material with
respect to the Company; and, except as disclosed in or contemplated by the
Prospectus, there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital stock.
(xix) There is no document or contract of a character required to be
described in the Registration Statement or the Prospectus, or to be filed
as an exhibit to the Registration Statement, that is not described or filed
as required.
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(xx) The Company is not and, after giving effect to the offering and
sale of the Offered Securities and the application of the proceeds thereof
as described in the Prospectus, will not be an "investment company" as
defined in the Investment Company Act of 1940.
(xxi) Neither the Company nor any of its affiliates does business with
the government of Cuba or with any person or affiliate located in Cuba
within the meaning of Section 517.075, Florida Statutes, and the Company
agrees to comply with such Section if prior to the completion of the
distribution of the Offered Securities it commences doing such business.
(b) Each Selling Stockholder severally and not jointly represents and
warrants to, and agrees with, the several Underwriters that:
(i) Such Selling Stockholder has, and on the First Closing Date
(defined below) will have, valid and unencumbered title to the Offered
Securities to be delivered by such Selling Stockholder on such Closing Date
and full right, power and authority to enter into this Agreement and to
sell, assign, transfer and deliver the Offered Securities to be delivered
by such Selling Stockholder on such Closing Date hereunder; and upon the
delivery of and payment for such Offered Securities on such Closing Date,
the several Underwriters will acquire valid and unencumbered title to the
Offered Securities to be delivered by such Selling Stockholder on such
Closing Date.
(ii) If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement: (A) on the
Effective Date of the Initial Registration Statement, the Initial
Registration Statement conformed in all material respects to the
requirements of the Act and the Rules and Regulations and did not include
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading, (B) on the Effective Date of the Additional Registration
Statement (if any), each Registration Statement conformed, or will conform,
in all material respects to the requirements of the Act and the Rules and
Regulations did not include, or will not include, any untrue statement of a
material fact and did not omit, or will not omit, to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading, and (C) on the date of this Agreement, the Initial
Registration Statement and, if the Effective Time of the Additional
Registration Statement is prior to the execution and delivery of this
Agreement, the Additional Registration Statement each conforms, and at the
time of filing of the Prospectus pursuant to Rule 424(b) or (if no such
filing is required) at the Effective Date of the Additional Registration
Statement in which the Prospectus is included, each Registration Statement
and the Prospectus will conform, in all material respects to the
requirements of the Act and the Rules and Regulations, and none of such
documents includes, or will include, any untrue statement of a material
fact or omits, or will omit, to state any material fact required to be
stated therein or necessary to make the statements therein (and, in case
of the Prospectus, in light of the circumstances under which they were
made) not misleading. If the Effective Time of the Initial Registration
Statement is subsequent to the execution and delivery of this Agreement: on
the Effective Date of the Initial Registration Statement, the Initial
Registration Statement and the Prospectus will conform in all material
respects to the requirements of the Act and the Rules and Regulations,
neither of such documents will include any untrue statement of a material
fact or will omit to state any material fact required to be stated therein
or necessary to make the statements therein (and, in the case of the
Prospectus, in light of the circumstances under which they were made) not
misleading. The two preceding sentences do not apply to statements in or
omissions from a Registration Statement or the Prospectus (or any
supplements thereto) based upon written information furnished to the
6
Company by any Underwriter through the Representatives specifically for use
therein, it being understood and agreed that the only such information is
that described as such in Section 7(c).
(iii) No consent, approval, authorization or order of, or filing
with, any governmental agency or body or any court is required to be
obtained or made by such Selling Stockholder for the consummation of the
transactions contemplated by the Custody Agreement or this Agreement in
connection with the sale of the Offered Securities sold by such Selling
Stockholder, except such as have been obtained and made for registration of
the Offered Securities under the Act and such as may be required by the
National Association of Securities Dealers, Inc., or under any foreign or
state securities laws;
(iv) The execution, delivery and performance of the Custody Agreement
and this Agreement and the consummation of the transactions therein and
herein contemplated will not result in a breach or violation of any of the
terms and provisions of, or constitute a default under, any statute, any
rule, regulation or order of any governmental agency or body or any court
having jurisdiction over such Selling Stockholder or any their properties
or any agreement or instrument to which such Selling Stockholder is a party
or by which such Selling Stockholder is bound or to which any of the
properties of such Selling Stockholder is subject; and
(v) Each of this Agreement, the Power of Attorney and related Custody
Agreement with respect to each Selling Stockholder has been duly
authorized, executed and delivered by such Selling Stockholder and
constitutes a valid and legally binding obligation of each such Selling
Stockholder enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors'
rights, to general equity principles and to applicable laws and public
policy considerations which may limit rights to indemnity or contribution
thereunder.
3. PURCHASE, SALE AND DELIVERY OF OFFERED SECURITIES. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company and each Selling Stockholder
agree, severally and not jointly, to sell to each Underwriter, and each
Underwriter agrees, severally and not jointly, to purchase from the Company and
each Selling Stockholder, at a purchase price of $ per share, the
respective number of shares of Firm Securities (rounded up or down, as
determined by CS First Boston Corporation ("CS First Boston") in its discretion,
in order to avoid fractions) obtained by multiplying 3,140,000 Firm Securities
in the case of the Company and the number of Firm Securities set forth opposite
the name of such Selling Stockholder in Schedule B hereto, in the case of a
Selling Stockholder, in each case, by a fraction the numerator of which is the
number of Firm Securities set forth opposite the name of such Underwriter in
Schedule A hereto and the denominator of which is the total number of Firm
Securities.
Certificates in negotiable form for the Offered Securities to be sold by
the Selling Stockholders hereunder have been placed in custody, for delivery
under this Agreement, under Custody Agreements made with American Stock Transfer
and Trust Company, as custodian ("Custodian"). Each Selling Stockholder agrees
that the shares represented by the certificates held in custody for such Selling
Stockholder under such Custody Agreements are subject to the interests of the
Underwriters hereunder, that the arrangements made by such Selling Stockholder
for such custody are to that extent irrevocable, and that the obligations of the
Selling Stockholders hereunder shall not be terminated by operation of law,
whether by the death of any individual Selling Stockholder or the occurrence of
any other event, or in the case of a trust, by the death of any trustee or
trustees or the termination of such trust. If any individual Selling
Stockholder or any such trustee or trustees should die, or if any other such
event
7
should occur, or if any of such trusts should terminate, before the delivery of
the Offered Securities hereunder, certificates for such Offered Securities shall
be delivered by the Custodian in accordance with the terms and conditions of
this Agreement as if such death or other event or termination had not occurred,
regardless of whether or not the Custodian shall have received notice of such
death or other event or termination.
The Company and the Custodian will deliver the Firm Securities to the
Representatives for the accounts of the Underwriters, against payment of the
purchase price in federal reserve funds immediately available by wire transfer
to the account of the Company at a bank acceptable to CS First Boston, payable
to the Company in the case of 3,140,000 shares of Firm Securities and in federal
reserve funds immediately available by wire transfer to the account of the
Custodian payable to the Custodian in the case of 860,000 shares of Firm
Securities, at the office of King & Spalding, Atlanta, Georgia, at 10:00 A.M.,
New York time, on , or at such other time not later than
seven full business days thereafter as CS First Boston and the Company
determine, such time being herein referred to as the "First Closing Date." The
certificates for the Firm Securities so to be delivered, will be in definitive
form, in such denominations and registered in such names as CS First Boston
requests upon reasonable notice and will be made available for checking and
packaging at the above office of King & Spalding at least 24 hours prior to the
First Closing Date.
In addition, upon written notice from CS First Boston given to the Company
from time to time not more than 30 days subsequent to the date of the
Prospectus, the Underwriters may purchase all or less than all of the Optional
Securities at the purchase price per Security to be paid for the Firm
Securities. The Company agrees to sell to the Underwriters the number of shares
of Optional Securities specified in such notice and the Underwriters agree,
severally and not jointly, to purchase such Optional Securities. Such Optional
Securities shall be purchased for the account of each Underwriter in the same
proportion as the number of shares of Firm Securities set forth opposite such
Underwriter's name bears to the total number of shares of Firm Securities
(subject to adjustment by CS First Boston to eliminate fractions) and may be
purchased by the Underwriters only for the purpose of covering over-allotments
made in connection with the sale of the Firm Securities. No Optional Securities
shall be sold or delivered unless the Firm Securities previously have been, or
simultaneously are, sold and delivered. The right to purchase the Optional
Securities or any portion thereof may be exercised from time to time and to the
extent not previously exercised may be surrendered and terminated at any time
upon notice by CS First Boston to the Company.
Each time for the delivery of and payment for the Optional Securities,
being herein referred to as an "Optional Closing Date", which may be the First
Closing Date (the First Closing Date and each Optional Closing Date, if any,
being sometimes referred to as a "Closing Date"), shall be determined by CS
First Boston but shall be not later than five full business days after written
notice of election to purchase Optional Securities is given. The Company will
deliver the Optional Securities being purchased on each Optional Closing Date to
the Representatives for the accounts of the several Underwriters, against
payment of the purchase price therefor in federal reserve funds immediately
available by wire transfer to the account of the Company at a bank acceptable to
CS First Boston, payable to the Company. The certificates for the Optional
Securities being purchased on each Optional Closing Date, will be in definitive
form, in such denominations and registered in such names as CS First Boston
requests upon reasonable notice prior to such Optional Closing Date and will be
made available for checking and packaging at the above office of King & Spalding
at a reasonable time in advance of such Optional Closing Date.
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4. OFFERING BY UNDERWRITERS. It is understood that the several
Underwriters propose to offer the Offered Securities for sale to the public as
set forth in the Prospectus.
5. CERTAIN AGREEMENTS OF THE COMPANY AND THE SELLING STOCKHOLDERS.
The Company agrees with the several Underwriters that:
(a) If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement, the Company will
file the Prospectus with the Commission pursuant to and in accordance with
subparagraph (1) (or, if applicable and if consented to by CS First Boston,
subparagraph (4)) of Rule 424(b) not later than the earlier of (A) the
second business day following the execution and delivery of this Agreement
or (B) the fifteenth business day after the Effective Date of the Initial
Registration Statement. The Company will advise CS First Boston promptly
of any such filing pursuant to Rule 424(b). If the Effective Time of the
Initial Registration Statement is prior to the execution and delivery of
this Agreement and an additional registration statement is necessary to
register a portion of the Offered Securities under the Act but the
Effective Time thereof has not occurred as of such execution and delivery,
the Company will file the additional registration statement or, if filed,
will file a post-effective amendment thereto with the Commission pursuant
to and in accordance with Rule 462(b) on or prior to 10:00 P.M., New York
time, on the date of this Agreement or, if earlier, on or prior to the time
the Prospectus is printed and distributed to any Underwriter, or will make
such filing at such later date as shall have been consented to by CS First
Boston.
(b) The Company will advise CS First Boston promptly of any proposal
to amend or supplement the initial or any additional registration statement
as filed or the related prospectus or the Initial Registration Statement,
the Additional Registration Statement (if any) or the Prospectus and will
not effect such amendment or supplementation without CS First Boston's
consent, which shall not be unreasonably withheld; and the Company will
also advise CS First Boston promptly of the effectiveness of each
Registration Statement (if its Effective Time is subsequent to the
execution and delivery of this Agreement) and of any amendment or
supplementation of a Registration Statement or the Prospectus and of the
institution by the Commission of any stop order proceedings in respect of a
Registration Statement and will use its best efforts to prevent the
issuance of any such stop order and to obtain as soon as possible its
lifting, if issued.
(c) If, at any time when a prospectus relating to the Offered
Securities is required to be delivered under the Act in connection with
sales by any Underwriter or dealer, any event occurs as a result of which
the Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if it is necessary at any time to
amend or supplement the Prospectus to comply with the Act, the Company will
promptly notify CS First Boston of such event and will promptly prepare and
file with the Commission, at its own expense, an amendment or supplement
which will correct such statement or omission or an amendment which will
effect such compliance. Neither CS First Boston's consent to, nor the
Underwriters' delivery of, any such amendment or supplement shall
constitute a waiver of any of the conditions set forth in Section 6.
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(d) As soon as practicable, but not later than the Availability Date
(as defined below), the Company will make generally available to its
securityholders an earnings statement covering a period of at least 12
months beginning after the Effective Date of the Initial Registration
Statement (or, if later, the Effective Date of the Additional Registration
Statement) which will satisfy the provisions of Section 11(a) of the Act.
For the purpose of the preceding sentence, "Availability Date" means the
45th day after the end of the fourth fiscal quarter following the fiscal
quarter that includes such Effective Date, except that, if such fourth
fiscal quarter is the last quarter of the Company's fiscal year,
"Availability Date" means the 90th day after the end of such fourth fiscal
quarter.
(e) The Company will furnish to the Representatives copies of each
Registration Statement (three of which will be signed and will include all
exhibits), each related preliminary prospectus, and, so long as a
prospectus relating to the Offered Securities is required to be delivered
under the Act in connection with sales by any Underwriter or dealer, the
Prospectus and all amendments and supplements to such documents, in each
case in such quantities as CS First Boston requests. The Prospectus shall
be so furnished on or prior to 3:00 P.M., New York time, on the business
day following the later of the execution and delivery of this Agreement or
the Effective Time of the Initial Registration Statement. All other
documents shall be so furnished as soon as available. The Company will pay
the expenses of printing and distributing to the Underwriters all such
documents.
(f) The Company will arrange for the qualification of the Offered
Securities for sale under the laws of such jurisdictions as CS First Boston
designates and will continue such qualifications in effect so long as
required to complete the distribution of the Offered Securities, provided
that the Company shall not be required to qualify as a foreign corporation
or to consent to service of process under the laws of any such jurisdiction
(except service of process with respect to the offering and sale of the
Offered Securities).
(g) During the period of five years hereafter, the Company will
furnish to the Representatives and, upon request, to each of the other
Underwriters, as soon as practicable after the end of each fiscal year, a
copy of its annual report to stockholders for such year; and the Company
will furnish to the Representatives (i) as soon as available, a copy of
each report or definitive proxy statement of the Company filed with the
Commission under the Securities Exchange Act of 1934, as amended, or mailed
to stockholders, and (ii) from time to time, such other information of a
public nature concerning the Company as CS First Boston may reasonably
request.
(h) For a period of 180 days after the date of the Prospectus, the
Company will not offer, sell, contract to sell, pledge or otherwise dispose
of, directly or indirectly, or file with the Commission a registration
statement under the Act relating to, any additional shares of its
Securities or securities convertible into or exchangeable or exercisable
for any shares of its Securities, or publicly disclose the intention to
make any such offer, sale, pledge, disposition or filing, without the prior
written consent of CS First Boston, except issuances of Securities pursuant
to the conversion or exchange of convertible or exchangeable securities or
the exercise of warrants or options, in each case outstanding on the date
hereof, grants of employee stock options pursuant to the terms of a plan in
effect on the date hereof and issuances of Securities pursuant to the
exercise of such options.
10
The Company and each Selling Stockholder, severally and not jointly, agree
with the several Underwriters that the Company will pay all expenses incident to
the performance of the obligations of the Company and such Selling Stockholder,
as the case may be (except for the underwriting discounts and commissions
payable with respect to the Selling Stockholders' shares sold in the Offering,
which each Selling Stockholder will bear in proportion to amounts sold), under
this Agreement, and will reimburse the Underwriters (if and to the extent
incurred by them) for any filing fees and other expenses (including fees and
disbursements of counsel) incurred by them in connection with qualification of
the Offered Securities for sale under the laws of such jurisdictions as CS First
Boston designates and the printing of memoranda relating thereto, for the filing
fee of the National Association of Securities Dealers, Inc. relating to the
Offered Securities, for any travel expenses of the Company's officers and
employees and any other expenses of the Company in connection with attending or
hosting meetings with prospective purchasers of the Offered Securities, for any
transfer taxes on the sale by the Selling Stockholders of the Offered Securities
to the Underwriters and for expenses incurred in distributing preliminary
prospectuses and the Prospectus (including any amendments and supplements
thereto) to the Underwriters.
Each Selling Stockholder agrees, severally and not jointly, to deliver to
CS First Boston, attention: Transactions Advisory Group, on or prior to the
First Closing Date a properly completed and executed United States Treasury
Department Form W-9 (or other applicable form or statement specified by Treasury
Department regulations in lieu thereof).
Each Selling Stockholder agrees, severally and not jointly, for a period of
180 days after the date of the Prospectus, not to offer, sell, contract to sell,
pledge or otherwise dispose of, directly or indirectly, any additional shares of
the Securities of the Company or securities convertible into or exchangeable or
exercisable for any shares of Securities, or publicly disclose the intention to
make any such offer, sale, pledge or disposition, without the prior written
consent of CS First Boston.
6. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The obligations of
the several Underwriters to purchase and pay for the Firm Securities on the
First Closing Date and the Optional Securities to be purchased on each Optional
Closing Date will be subject to the accuracy of the representations and
warranties on the part of the Company and the Selling Stockholders herein, to
the accuracy of the statements of Company officers made pursuant to the
provisions hereof, to the performance by the Company and the Selling
Stockholders of their obligations hereunder and to the following additional
conditions precedent:
(a) The Representatives shall have received a letter, dated the date
of delivery thereof (which, if the Effective Time of the Initial
Registration Statement is prior to the execution and delivery of this
Agreement, shall be on or prior to the date of this Agreement or, if the
Effective Time of the Initial Registration Statement is subsequent to the
execution and delivery of this Agreement, shall be prior to the filing of
the amendment or post-effective amendment to the registration statement to
be filed shortly prior to such Effective Time), of Coopers & Xxxxxxx
L.L.P., confirming that they are independent public accountants within the
meaning of the Act and the applicable published Rules and Regulations
thereunder and stating to the effect that:
(i) in their opinion the financial statements examined by
them and included in the Registration Statements comply as to form in
all material respects with the applicable accounting requirements of
the Act and the related published Rules and Regulations;
11
(ii) on the basis of a reading of the latest available
interim financial statements of the Company, inquiries of officials of
the Company who have responsibility for financial and accounting
matters and other specified procedures, nothing came to their
attention that caused them to believe that:
(A) at the date of the latest available balance sheet
read by such accountants, or at a subsequent specified date not
more than five days prior to the date of this Agreement, there
was any change in the capital stock or any increase in short-term
indebtedness or long-term debt of the Company or, at the date of
the latest available balance sheet read by such accountants,
there was any decrease in net current assets or net assets, as
compared with amounts shown on the latest balance sheet included
in the Prospectus; or
(B) for the period from the closing date of the latest
income statement included in the Prospectus to the closing date
of the latest available income statement read by such accountants
there were any decreases, as compared with the corresponding
period of the previous year, and with the period of corresponding
length ended the date of the latest income statement included in
the Prospectus, in net sales or net operating income or in the
total or per share amounts of income before extraordinary items
or net income;
except in all cases set forth in clauses (A) and (B) above for
changes, increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter; and
(iii) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other financial
information contained in the Registration Statements (in each case to
the extent that such dollar amounts, percentages and other financial
information are derived from the general accounting records of the
Company subject to the internal controls of the Company's accounting
system or are derived directly from such records by analysis or
computation) with the results obtained from inquiries, a reading of
such general accounting records and other procedures specified in such
letter and have found such dollar amounts, percentages and other
financial information to be in agreement with such results, except as
otherwise specified in such letter.
For purposes of this subsection, (i) if the Effective Time of the Initial
Registration Statements is subsequent to the execution and delivery of this
Agreement, "Registration Statements" shall mean the initial registration
statement as proposed to be amended by the amendment or post-effective amendment
to be filed shortly prior to its Effective Time, (ii) if the Effective Time of
the Initial Registration Statements is prior to the execution and delivery of
this Agreement but the Effective Time of the Additional Registration Statement
is subsequent to such execution and delivery, "Registration Statements" shall
mean the Initial Registration Statement and the additional registration
statement as proposed to be filed or as proposed to be amended by the post-
effective amendment to be filed shortly prior to its Effective Time, and (iii)
"Prospectus" shall mean the prospectus included in the Registration Statements.
12
(b) If the Effective Time of the Initial Registration Statement is
not prior to the execution and delivery of this Agreement, such Effective
Time shall have occurred not later than 10:00 P.M., New York time, on the
date of this Agreement or such later date as shall have been consented to
by CS First Boston. If the Effective Time of the Additional Registration
Statement (if any) is not prior to the execution and delivery of this
Agreement, such Effective Time shall have occurred not later than 10:00
P.M., New York time, on the date of this Agreement or, if earlier, the time
the Prospectus is printed and distributed to any Underwriter, or shall have
occurred at such later date as shall have been consented to by CS First
Boston. If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement, the Prospectus shall
have been filed with the Commission in accordance with the Rules and
Regulations and Section 5(a) of this Agreement. Prior to such Closing Date,
no stop order suspending the effectiveness of a Registration Statement
shall have been issued and no proceedings for that purpose shall have been
instituted or, to the knowledge of the Company, any Selling Stockholder or
the Representatives, shall be contemplated by the Commission.
(c) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred (i) any change, or any development or event
involving a prospective change, in the condition (financial or otherwise),
business, properties or results of operations of the Company which, in the
judgment of a majority in interest of the Underwriters including the
Representatives, is material and adverse and makes it impractical or
inadvisable to proceed with completion of the public offering or the sale
of and payment for the Offered Securities; (ii) any downgrading in the
rating of any debt securities of the Company by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule 436(g)
under the Act), or any public announcement that any such organization has
under surveillance or review its rating of any debt securities of the
Company (other than an announcement with positive implications of a
possible upgrading, and no implication of a possible downgrading, of such
rating); (iii) any suspension or limitation of trading in securities
generally on the New York Stock Exchange or any setting of minimum prices
for trading on such exchange, or any suspension of trading of any
securities of the Company on any exchange or in the over-the-counter
market; (iv) any banking moratorium declared by U.S. Federal or New York
authorities; or (v) any outbreak or escalation of major hostilities in
which the United States is involved, any declaration of war by Congress or
any other substantial national or international calamity or emergency if,
in the judgment of a majority in interest of the Underwriters including the
Representatives, the effect of any such outbreak, escalation, declaration,
calamity or emergency makes it impractical or inadvisable to proceed with
completion of the public offering or the sale of and payment for the
Offered Securities.
(d) The Representatives shall have received an opinion, dated such
Closing Date, of Xxxxx & XxXxxxxx, counsel for the Company, to the effect
that:
(i) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware,
with corporate power and authority to own its properties and conduct
its business as described in the Prospectus; and the Company is duly
qualified to do business as a foreign corporation in good standing in
each jurisdiction in which it is known to such counsel to own or lease
property or conduct business and in which the failure, individually or
in the aggregate, to be so qualified would have a material adverse
effect on the Company.
13
(ii) The Offered Securities delivered on such Closing Date and
all other outstanding shares of the Securities of the Company have
been duly authorized and validly issued, are fully paid and
nonassessable and conform to the description thereof contained in the
Prospectus; the stockholders of the Company have no preemptive rights
with respect to the Offered Securities; and, to the best knowledge of
such counsel, there are no other rights to subscribe for or purchase
any shares of capital stock issued by the Company and (except as
described in the Prospectus) no outstanding securities or obligations
of the Company convertible into, exercisable for or exchangable for
any capital stock of the Company.
(iii) To the best knowledge of such counsel, no person or entity
has any right, not effectively satisfied or waived, to require the
Company to include any securities with the Securities registered
pursuant to a Registration Statement; no person or entity has any
right to require the Company to file a registration statement under
the Act with respect to any securities of the Company owned or to be
owned by such person; and, except as described in the Prospectus, no
person or entity has any right to require the Company to include such
securities with securities to be registered pursuant to any other
registration statement filed by the Company under the Act.
(iv) No consent, approval, authorization, or order of, or filing
with, any governmental agency or body or, to such counsel's knowledge,
any court is required to be obtained or made by the Company in
connection with the sale of the Offered Securities by the Company
other than registration of the Offered Securities Under the Act
(except such counsel will not express an opinion as to any necessary
qualification under the state securities or blue sky laws of the
various jurisdictions in which the Offered Securities are being
offered by the Underwriters or the review of the terms of the public
offering of the Offered Securities by the NASD).
(v) The execution, delivery and performance of this Agreement and
the consummation of the transactions herein contemplated will not
result in a breach or violation of any of the terms and provisions of
the charter or bylaws of the Company. The execution, delivery and
performance of this Agreement and the consummation of the transactions
herein contemplated will not result in a breach or violation of any of
the terms and provisions of, or constitute a default under, any
statute, any rule, regulation or order of any governmental agency or
body or any court having jurisdiction over the Company or any of its
properties, or any agreement or instrument to which the Company is a
party or by which the Company is bound or to which any of the
properties of the Company is subject, of which such counsel is aware,
which, breach, default or violation would have a material adverse
effect on the Company.
(vi) To the best knowledge of such counsel, there are no pending
actions, suits or proceedings against or affecting the Company or any
of its properties that, if determined adversely to the Company, would
individually or in the aggregate have a material adverse effect on the
condition (financial or otherwise), business, properties or results of
operations of the Company, or would materially and adversely affect
the ability of the Company to perform its obligations under this
Agreement, or which are otherwise material in the context of the sale
of the Offered Securities; and no such actions, suits or proceedings
are threatened or, to the Company's knowledge, contemplated.
14
(vii) This Agreement has been duly authorized, executed and
delivered by the Company.
(viii) The Initial Registration Statement was declared effective
under the Act as of the date specified in such opinion, the Additional
Registration Statement (if any) was filed and became effective under
the Act as of the date specified in such opinion, the Prospectus
either was filed with the Commission pursuant to subparagraph (1) or
(4) of Rule 424(b) on the date specified therein or was included in
the Initial Registration Statement or the Additional Registration
Statement (as the case may be), and, to the best knowledge of such
counsel, no stop order suspending the effectiveness of a Registration
Statement or any part thereof has been issued and no proceedings for
that purpose have been instituted or are pending or contemplated under
the Act, and each Registration Statement and the Prospectus, and each
amendment or supplement thereto, as of their respective effective or
issue dates, complied as to form in all material respects with the
requirements of the Act and the Rules and Regulations.
(ix) The statements in the Registration Statement and the
Prospectus under the captions "Business -- Regulation," "Description
of Capital Stock" and "Shares Eligible For Future Sale," insofar as
they are descriptions of laws, regulations and rules, of legal and
governmental proceedings or of contracts, agreements, leases and other
legal documents known to such counsel, or refer to statements of law
or legal conclusions, are complete and accurate in all material
respects.
In addition, such counsel shall state that it has participated in
conferences with officers and other representatives of the Company,
representatives of the independent public accountants for the Company
and the Representatives and counsel to the Underwriters at which the
contents of the Registration Statement and Prospectus and related
matters were discussed and, although such counsel has not undertaken
to investigate or verify independently and does not assume any
responsibility for, the accuracy, completeness or fairness of the
statements contained in the Registration Statement and Prospectus
(except as otherwise expressly set forth herein), on the basis of the
foregoing, no facts have come to such counsel's attention that caused
such counsel to believe that any part of the Registration Statement
(other than the financial statements and notes thereto and other
financial, statistical and accounting data or schedules included
therein, or omitted therefrom, as to which such counsel need express
no opinion), as amended or supplemented, at the time such part of the
Registration Statement became effective, contained an untrue statement
of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, or the Prospectus (other than the financial statements and
notes thereto and other financial, statistical and accounting data or
schedules included therein, or omitted therefrom, as to which such
counsel expresses no opinion), as amended or supplemented, on the date
of filing thereof with the Commission and on the date hereof,
contained an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
15
(e) The Representatives shall have received the opinion contemplated
in the Power of Attorney executed and delivered by each Selling Stockholder
and an opinion, dated such Closing Date, of Holland & Knight, counsel for
the Selling Stockholders, to the effect that:
(i) Each Selling Stockholder had valid and unencumbered title to
the Offered Securities delivered by such Selling Stockholder on such
Closing Date and had full right, power and authority to sell, assign,
transfer and deliver the Offered Securities delivered by such Selling
Stockholder on such Closing Date hereunder; and the several
Underwriters have acquired valid and unencumbered title to the Offered
Securities purchased by them from the Selling Stockholders on such
Closing Date hereunder;
(ii) No consent, approval, authorization or order of, or filing
with, any governmental agency or body or, to such counsel's knowledge,
any court is required to be obtained or made by any Selling
Stockholder for the consummation of the transactions contemplated by
the Custody Agreement or this Agreement in connection with the sale of
the Offered Securities sold by the Selling Stockholders, other than
the registration of the Offered Securities under the Act or approval
of the terms of the public offering of the Offered Security by the
NASD (except such counsel will not express an opinion as to any
necessary qualification under the state securities or blue sky laws of
the various jurisdictions in which the Offered Securities are being
offered by the Underwriters);
(iii) The execution, delivery and performance of the Custody
Agreement and this Agreement and the consummation of the transactions
therein and herein contemplated will not result in a breach or
violation of any of the terms and provisions of, or constitute a
default under, any agreement or instrument to which any Selling
Stockholder is a party or by which any Selling Stockholder is bound or
to which any of the properties of any Selling Stockholder is subject,
of which such counsel is aware;
(iv) The Power of Attorney and related Custody Agreement with
respect to each Selling Stockholder has been duly authorized, executed
and delivered by or on behalf of such Selling Stockholder and
constitute valid and legally binding obligations of each such Selling
Stockholder enforceable in accordance with their respective terms,
except (a) as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally and general principles of equity, (b) as
enforceability of any indemnification provisions may be limited under
federal and state securities or blue sky laws or public policy,
(c) that the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to equitable defenses,
including without limitation concepts of reasonableness, materiality,
good faith and fair dealing and to the discretion of the court before
which any proceeding therefor may be brought, and (d) to the extent
that certain waivers of rights are void as against public policy; and
(v) This Agreement has been duly authorized, executed and
delivered by each Selling Stockholder.
16
(f) The Representatives shall have received from King & Spalding,
counsel for the Underwriters, such opinion or opinions, dated such Closing
Date, with respect to the incorporation of the Company, the validity of the
Offered Securities delivered on such Closing Date, the Registration
Statements, the Prospectus and other related matters as the Representatives
may require, and the Selling Stockholders and the Company shall have
furnished to such counsel such documents as they may reasonably request for
the purpose of enabling them to pass upon such matters.
(g) The Representatives shall have received a certificate, dated such
Closing Date, of the President or any Vice-President and a principal
financial or accounting officer of the Company in which such officers, to
the best of their knowledge after reasonable investigation, shall state
that: the representations and warranties of the Company in this Agreement
are true and correct; the Company has complied in all material respects
with all agreements and satisfied all conditions on its part to be
performed or satisfied hereunder at or prior to such Closing Date; no stop
order suspending the effectiveness of any Registration Statement has been
issued and no proceedings for that purpose have been instituted or are
contemplated by the Commission; the Additional Registration Statement (if
any) satisfying the requirements of subparagraphs (1) and (3) of Rule
462(b) was filed pursuant to Rule 462(b), including payment of any
applicable filing fee in accordance with Rule 111(a) or (b) under the Act,
prior to the time the Prospectus was printed and distributed to any
Underwriter; and, subsequent to the date of the most recent financial
statements in the Prospectus, there has been no material adverse change,
nor any development or event involving a prospective material adverse
change, in the condition (financial or otherwise), business, properties or
results of operations of the Company except as set forth in or contemplated
by the Prospectus or as described in such certificate.
(h) The Representatives shall have received a letter, dated such
Closing Date, of Coopers & Xxxxxxx L.L.P. which meets the requirements of
subsection (a) of this Section, except that the specified date referred to
in such subsection will be a date not more than five days prior to such
Closing Date for the purposes of this subsection.
The Selling Stockholders and the Company will furnish the Representatives with
such conformed copies of such opinions, certificates, letters and documents as
the Representatives reasonably request. CS First Boston may in its sole
discretion waive on behalf of the Underwriters compliance with any conditions to
the obligations of the Underwriters hereunder, whether in respect of an Optional
Closing Date or otherwise.
7. INDEMNIFICATION AND CONTRIBUTION. (a) The Company will indemnify and
hold harmless each Underwriter against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and will reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending any
such loss, claim, damage, liability or action as such expenses are incurred;
provided, however, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue
17
statement in or omission or alleged omission from any of such documents in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through the Representatives specifically for use
therein, it being understood and agreed that the only such information furnished
by any Underwriter consists of the information described as such in subsection
(c) below; and provided, further, that such indemnity with respect to any untrue
statement or omission of a material fact contained in any preliminary
prospectus, shall not inure to the benefit of any Underwriter from whom the
person asserting any such losses, claims, damages or liabilities purchased the
shares that are subject thereof if such person did not receive a copy of the
Prospectus (or the Prospectus as supplemented) at or prior to the confirmation
of the sale of such shares to such person in any case where delivery is required
under the Act and such untrue statement or omission of a material fact contained
in any preliminary prospectus was corrected in the Prospectus (or the Prospectus
as supplemented).
(b) The Selling Stockholders severally, and not jointly, will indemnify and
hold harmless each Underwriter against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon
information provided in writing by such Selling Stockholder, upon any untrue
statement or alleged untrue statement of any material fact contained in any
Registration Statement, the Prospectus, or any amendment or supplement thereto,
or any related preliminary prospectus, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading (in
each case only to the extent that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company or any Underwriter
by a Selling Stockholder specifically for use therein) and will reimburse each
Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that each Selling Stockholder will not be liable in any such case to the extent
that any such loss, claim, damage or liability (i) arises out of or is based
upon an untrue statement or alleged untrue statement in or omission from any of
such documents in reliance upon and conformity with written information
furnished to the Company by an Underwriter through the Representatives
specifically for use therein, or (ii) is in excess of the net proceeds of the
Offering received by such Selling Stockholder.
(c) Each Underwriter will severally and not jointly indemnify and hold
harmless the Company and the Selling Stockholders against any losses, claims,
damages or liabilities to which the Company or the Selling Stockholders may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in any Registration Statement, the Prospectus, or any amendment or
supplement thereto, or any related preliminary prospectus, or arise out of or
are based upon the omission or the alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission was
made in reliance upon and in conformity with written information furnished to
the Company by such Underwriter through the Representatives specifically for use
therein, and will reimburse any legal or other expenses reasonably incurred by
the Company and any Selling Stockholder in connection with investigating or
defending any such loss, claim, damage, liability or action as such expenses are
incurred, it being understood and agreed that the only such information
furnished by any Underwriter consists of the following information in the
Prospectus furnished on behalf of each Underwriter: the last paragraph at the
bottom of the cover page concerning the terms of
18
the offering by the Underwriters, the legend concerning over-allotments and
stabilizing on the inside front cover page and the concession and reallowance
figures and statement regarding discretionary sales appearing in the fourth and
fifth paragraphs, respectively, under the caption "Underwriting."
(d) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party under
subsection (a), (b) or (c) above, notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under subsection (a), (b) or (c) above. In case any such action
is brought against any indemnified party and it notifies an indemnifying party
of the commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party (who shall not, except
with the consent of the indemnified party, be counsel to the indemnifying
party), and after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party will
not be liable to such indemnified party under this Section for any legal or
other expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened action in respect of
which any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party unless such settlement
includes an unconditional release of such indemnified party from all liability
on any claims that are the subject matter of such action. An indemnifying party
will not be liable for any settlement of any action or claim effected without
its written consent.
(e) If the indemnification provided for in this Section is unavailable or
insufficient to hold harmless an indemnified party under subsection (a), (b) or
(c) above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a), (b) or (c) above (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and each Selling Stockholder on the one hand and the Underwriters on the
other from the offering of the Securities or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company and each Selling Stockholder on
the one hand and the Underwriters on the other in connection with the statements
or omissions which resulted in such losses, claims, damages or liabilities as
well as any other relevant equitable considerations. The relative benefits
received by the Company and each Selling Stockholder on the one hand and the
Underwriters on the other shall be deemed to be in the same proportion as the
total net proceeds from the offering (before deducting expenses) received by the
Company and such Selling Stockholder bear to the total underwriting discounts
and commissions received by the Underwriters. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company, a Selling
Stockholder or the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission. The amount paid by an indemnified party as a result of
the losses, claims, damages or liabilities referred to in the first sentence of
this subsection (e) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any action or claim which is the subject of this subsection (e).
Notwithstanding the provisions of this subsection (e), no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price
19
at which the Securities underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (e) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(f) The obligations of the Company and the Selling Stockholders under this
Section shall be in addition to any liability which the Company and the Selling
Stockholders may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls any Underwriter within the
meaning of the Act; and the obligations of the Underwriters under this Section
shall be in addition to any liability which the respective Underwriters may
otherwise have and shall extend, upon the same terms and conditions, to each
director of the Company, to each officer of the Company who has signed the
Registration Statement and to each person, if any, who controls the Company
within the meaning of the Act.
8. DEFAULT OF UNDERWRITERS. If any Underwriter or Underwriters default in
their obligations to purchase Offered Securities hereunder on any Closing Date
and the aggregate number of shares of Offered Securities that such defaulting
Underwriter or Underwriters agreed but failed to purchase does not exceed 10% of
the total number of shares of Offered Securities that the Underwriters are
obligated to purchase on such Closing Date, CS First Boston may make
arrangements satisfactory to the Company and the Selling Stockholders for the
purchase of such Offered Securities by other persons, including any of the
Underwriters, but if no such arrangements are made by such Closing Date, the
non-defaulting Underwriters shall be obligated severally, in proportion to their
respective commitments hereunder, to purchase the Offered Securities that such
defaulting Underwriters agreed but failed to purchase on such Closing Date. If
any Underwriter or Underwriters so default and the aggregate number of shares of
Offered Securities with respect to which such default or defaults occur exceeds
10% of the total number of shares of Offered Securities that the Underwriters
are obligated to purchase on such Closing Date and arrangements satisfactory to
CS First Boston, the Company and the Selling Stockholders for the purchase of
such Offered Securities by other persons are not made within 36 hours after such
default, this Agreement will terminate without liability on the part of any
non-defaulting Underwriter, the Company or the Selling Stockholders, except as
provided in Section 9 (provided that if such default occurs with respect to
Optional Securities after the First Closing Date, this Agreement will not
terminate as to the Firm Securities or any Optional Securities purchased
previously. As used in this Agreement, the term "Underwriter" includes any
person substituted for an Underwriter under this Section. Nothing herein will
relieve a defaulting Underwriter from liability for its default.
9. SURVIVAL OF CERTAIN REPRESENTATIONS AND OBLIGATIONS. The respective
indemnities, agreements, representations, warranties and other statements of the
Company or its officers, the Selling Stockholders and of the several
Underwriters set forth in or made pursuant to this Agreement will remain in full
force and effect, regardless of any investigation, or statement as to the
results thereof, made by or on behalf of any Underwriter, any Selling
Stockholder, the Company or any of their respective representatives, officers or
directors or any controlling person, and will survive delivery of and payment
for the Offered Securities. If this Agreement is terminated pursuant to Section
8 or if for any reason the purchase of the Offered Securities by the
Underwriters is not consummated, the Company and the Selling Stockholders shall
remain responsible for the expenses to be paid or reimbursed by them pursuant to
Section 5 and the respective obligations of the Company, the Selling
Stockholders, and the Underwriters pursuant to Section 7 shall remain in effect,
and if any Offered Securities have been purchased hereunder the representations
and
20
warranties in Section 2 and all obligations under Section 5 shall also remain in
effect. If the purchase of the Offered Securities by the Underwriters is not
consummated for any reason other than solely because of the termination of this
Agreement pursuant to Section 8 or the occurrence of any event specified in
clause (iii), (iv) or (v) of Section 6(c), the Company will reimburse the
Underwriters for all out-of-pocket expenses (including fees and disbursements of
counsel) reasonably incurred by them in connection with the offering of the
Offered Securities.
10. NOTICES. All communications hereunder will be in writing and, if sent
to the Underwriters, will be mailed or delivered and confirmed to the
Representatives, c/o CS First Boston Corporation, Park Avenue Plaza, New York,
N.Y. 10055, Attention: Investment Banking Department - Transactions Advisory
Group, with a copy to King & Spalding, 000 Xxxxxxxxx Xxxxxx, X.X., Xxxxxxx, XX
00000-0000, Attn: Xxxxxxx X. Xxxxx, Esq., or, if sent to the Company, will be
mailed or delivered and confirmed to it at 000 Xxxxxxxxx Xxxxxx, Xxxxx Xxxxx,
Xxxxxxxxxx, XX 00000, Attention: Xxxxx X. Xxxx, with a copy to Xxxxx & XxXxxxxx,
The Xxxxx Fargo Plaza, 12th Floor, 000 Xxxx Xxxxxxxx, Xxx Xxxxx, Xxxxxxxxxx
00000-0000, Attn: Xxxx X. Xxxxxxxx, Esq., or, if sent to the Selling
Stockholders or any of them, will be mailed, delivered or telegraphed and
confirmed to the Selling Stockholders at the addresses set forth on Schedule B
below each Selling Stockholder's name, with a copy to Holland & Knight, 000
Xxxxx Xxxxxx Xxxxx, Xxxxx 0000, Xxxxx, Xxxxxxx 00000-0000, Attn: Xxxxxxx X.
Xxxxxxxxx, Esq.; provided, however, that any notice to an Underwriter pursuant
to Section 7 will be mailed or delivered and confirmed to such Underwriter.
11. SUCCESSORS. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective personal representatives and
successors and the officers and directors and controlling persons referred to in
Section 7, and no other person will have any right or obligation hereunder.
12. REPRESENTATION. The Representatives will act for the several
Underwriters in connection with the transactions contemplated by this Agreement,
and any action under this Agreement taken by the Representatives, jointly or by
CS First Boston, will be binding upon all the Underwriters. _____________,
__________ and ___________ (the "Attorneys") will act for the Selling
Stockholders in connection with such transactions, and any action under or in
respect of this Agreement taken by the Attorneys will be binding upon all the
Selling Stockholders.
13. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
14. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAWS.
The Company and each Selling Stockholder hereby submit to the non-exclusive
jurisdiction of the Federal and state courts in the Borough of Manhattan in The
City of New York in any suit or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby.
21
If the foregoing is in accordance with the Representatives' understanding
of our agreement, kindly sign and return to the Company three counterparts
hereof, whereupon this Agreement will become a binding agreement among the
Selling Stockholders, the Company and the several Underwriters in accordance
with its terms.
Very truly yours,
THE SELLING STOCKHOLDERS: By:.....................................
[Name]
Attorney-in-fact
THE COMPANY: DIGITAL LIGHTWAVE, INC.
By:.....................................
Name:
Title:
The foregoing Underwriting Agreement
is hereby confirmed and accepted as of
the date first above written.
CS FIRST BOSTON CORPORATION
Acting on its behalf and as the
Representative of the several Underwriters.
By:...............................
Name:
Title:
SCHEDULE A
NUMBER OF
FIRM SECURITIES
UNDERWRITER TO BE PURCHASED
----------- ---------------
CS First Boston Corporation............................
-------------
Total . . . . . . . . . . . . 4,000,000
-------------
-------------
SCHEDULE B
NUMBER OF
FIRM SECURITIES
SELLING STOCKHOLDER TO BE SOLD
------------------- ---------------
Norton X. Xxxxx 300,000
Xxxxxxxxx Capital Corp. 225,334
Xxxx Xxxxxxx 69,453
Xxxxxxx X. Xxxx 66,801
Xxxxxxx X. Xxxx 40,000
Xxxxx X. Xxxxxx or Xxxxxxxx Xxxxxxxx Xxxxxx 11,638
Xxxxxx X. Xxxxxxxxxx 5,986
Xxxxxx X. and Xxxxxx X. Xxxxxxx 6,339
Xxxxxxx X. Xxxx 8,001
Xxxxxx Xxxxx 8,001
Jakob Kryszek 6,334
Xxxxxx X. Xxxx 4,667
ASK Xxxxx Trust 4,667
Xxxxxxxx Xxxxx 3,267
Xxxxx & Xxxx Xxxxx 3,134
Xxxx X. Xxxxx Residuary Trust 3,134
Venture Tech Investors 2,934
First Trust Corp. TTEE for Xxxx Xxxxxxx 1,701
Xxxx Xxxxxxx 2,334
Xxxx Xxxxxxxx 2,801
Monte Factor TTEE under the will of Xxx X. Factor 1,867
Xxxxx X. XxXxxxx III/Xxxxxx Trust 1,400
Xxxxxx X. Xxxxxx 1,400
Xxxx Xxxxx 1,334
Xxxxxxxx X. Xxxxxxx 1,053
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Total...................................... 860,000
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