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CIENA CORPORATION
COMMON STOCK, PAR VALUE $.01 PER SHARE
-------------
UNDERWRITING AGREEMENT
(U.S. VERSION)
_________________, 1997
Xxxxxxx, Xxxxx & Co.,
Alex. Xxxxx & Sons Incorporated,
Xxxxxxx, Xxxxxx & Xxxxxxxxx, L.L.C.,
Xxxxxxx X. Xxxxxxxx & Company,
As representatives of the several
Underwriters named in Schedule I hereto,
c/o Goldman, Xxxxx & Co.,
00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
CIENA Corporation, a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the Underwriters named in Schedule I hereto (the "Underwriters") an
aggregate of 4,000,000 shares (the "Firm Shares") and, at the election of the
Underwriters, up to 600,000 additional shares (the "Optional Shares") of Common
Stock, par value $.01 per share ("Stock"), of the Company (the Firm Shares and
the Optional Shares that the Underwriters elect to purchase pursuant to Section
2 hereof being collectively called the "Shares").
It is understood and agreed to by all parties that the Company
is concurrently entering into an agreement (the "International Underwriting
Agreement") providing for the sale by the Company of up to a total of 1,150,000
shares of Stock (the "International Shares"), including the over-allotment
option thereunder, through arrangements with certain underwriters outside the
United States (the "International Underwriters"), for whom Xxxxxxx Sachs
International, Alex. Xxxxx & Sons Incorporated, Xxxxxxx, Xxxxxx & Xxxxxxxxx,
L.L.C. and Xxxxxxx X. Xxxxxxxx & Company are acting as lead managers. Anything
herein or therein to the contrary notwithstanding, the respective closings
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under this Agreement and the International Agreement are hereby expressly made
conditional on one another. The Underwriters hereunder and the International
Underwriters are simultaneously entering into an Agreement between U.S. and
International Underwriting Syndicates (the "Agreement between Syndicates")
which provides, among other things, for the transfer of shares of Stock between
the two syndicates. Two forms of prospectus are to be used in connection with
the offering and sale of shares of Stock contemplated by the foregoing, one
relating to the Shares hereunder and the other relating to the International
Shares. The latter form of prospectus will be identical to the former except
for certain substitute pages. Except as used in Sections 2, 3, 4, 9 and 11
herein, and except as the context may otherwise require, references hereinafter
to the Shares shall include all the shares of Stock which may be sold pursuant
to either this Agreement or the International Underwriting Agreement, and
references herein to any prospectus whether in preliminary or final form, and
whether as amended or supplemented, shall include both the U.S. and the
international versions thereof.
1. The Company represents and warrants to, and agrees with,
each of the Underwriters that:
(a) A registration statement on Form S-1
(File No. 333-_________) (the "Initial Registration
Statement") in respect of the Shares has been filed with the
Securities and Exchange Commission (the "Commission"); the
Initial Registration Statement and any post-effective
amendment thereto, each in the form heretofore delivered to
you, and, excluding exhibits thereto, to you for each of the
other Underwriters, have been declared effective by the
Commission in such form; other than a registration statement,
if any, increasing the size of the offering (a "Rule 462(b)
Registration Statement"), filed pursuant to Rule 462(b) under
the Securities Act of 1933, as amended (the "Act"), which will
become effective upon filing, no other document with respect
to the Initial Registration Statement has heretofore been
filed with the Commission; and no stop order suspending the
effectiveness of the Initial Registration Statement, any
post-effective amendment thereto or the Rule 462(b)
Registration Statement, if any, has been issued and no
proceeding for that purpose has been initiated or threatened
by the Commission (any preliminary prospectus included in the
Initial Registration Statement or filed with the Commission
pursuant to Rule 424(a) of the rules and regulations of the
Commission under the Act, is hereinafter called a "Preliminary
Prospectus"; the various parts of the Initial Registration
Statement and the Rule 462(b) Registration Statement, if any,
including all exhibits thereto and including the information
contained in the form of final prospectus filed with the
Commission pursuant to Rule 424(b) under the Act in accordance
with Section 5(a) hereof and deemed by virtue of Rule 430A
under the Act to be part of the Initial Registration Statement
at the time it was declared effective, each as amended at the
time such part of the registration statement became effective
or such part of the Rule 462(b) Registration Statement, if
any, became or hereafter becomes effective, are hereinafter
collectively called the "Registration Statement"; and such
final prospectus, in the form first filed pursuant to Rule
424(b) under the Act, is hereinafter called the "Prospectus").
(b) No order preventing or suspending
the use of any Preliminary Prospectus has been issued by the
Commission, and each Preliminary Prospectus, at the time of
filing thereof, conformed in all material respects to the
requirements of the Act and the rules and regulations of the
Commission thereunder, and did not contain an untrue statement
of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that this
representation and warranty shall not apply to any statements
or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an
Underwriter through Xxxxxxx, Xxxxx
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& Co. expressly for use therein;
(c) The Registration Statement conforms,
and the Prospectus and any further amendments or supplements
to the Registration Statement or the Prospectus will conform,
in all material respects to the requirements of the Act and
the rules and regulations of the Commission thereunder and do
not and will not, as of the applicable effective date as to
the Registration Statement and any amendment thereto and as of
the applicable filing date as to the Prospectus and any
amendment or supplement thereto, contain an untrue statement
of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements
therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements
or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an
Underwriter through Xxxxxxx, Sachs & Co. expressly for use
therein;
(d) The Company has not sustained since
the date of the latest audited financial statements included
in the Prospectus any material loss or interference with its
business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus; and,
since the respective dates as of which information is given in
the Registration Statement and the Prospectus, there has not
been any change in the capital stock or long-term debt of the
Company or any material adverse change, or any development
reasonably likely to result in a prospective material adverse
change, in or affecting the general affairs, management,
financial position, stockholders' equity or results of
operations of the Company, otherwise than as set forth or
contemplated in the Prospectus;
(e) The Company does not own any real
property and has good and marketable title to all personal
property owned by it, in each case free and clear of all
liens, encumbrances and defects except such as are described
in the Prospectus or such as do not materially affect the
value of such property and do not interfere with the use made
and proposed to be made of such property by the Company; and
any real property and buildings held under lease by the
Company are held by it under valid, subsisting and enforceable
leases with such exceptions as are not material and do not
interfere with the use made and proposed to be made of such
property and buildings by the Company;
(f) The Company has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of the State of Delaware, with power
and authority (corporate and other) to own its properties and
conduct its business as described in the Prospectus, and has
been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws
of each other jurisdiction in which it owns or leases
properties or conducts any business so as to require such
qualification, or is subject to no material liability or
disability by reason of the failure to be so qualified in any
such jurisdiction;
(g) The Company has an authorized
capitalization as set forth in the
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Prospectus, and all of the issued shares of capital stock of
the Company have been duly and validly authorized and issued,
are fully paid and non-assessable, conform to the description
of the Stock contained in the Prospectus and were not issued
in violation of or subject to any preemptive rights or other
rights to subscribe for or purchase any securities; except as
disclosed in or contemplated by the Prospectus and the
financial statements of the Company, and the related notes
thereto, included in the Prospectus, the Company does not
have any outstanding options to purchase, or any preemptive
rights or other rights to subscribe for or to purchase, any
securities or obligations convertible into, or any contracts
or commitments to issue or sell, shares of its capital stock
or any such options, rights, convertible securities or
obligations; and the description of the Company's stock
option, stock bonus and other stock plans or arrangements, and
the options or other rights granted and exercised thereunder,
set forth in the Prospectus accurately and fairly presents the
information required to be shown with respect to such plans,
arrangements, options and rights.
(h) The Shares to be issued and sold by
the Company to the Underwriters hereunder and under the
International Underwriting Agreement have been duly and
validly authorized and, when issued and delivered against
payment therefor as provided herein and in the International
Underwriting Agreement, will be duly and validly issued and
fully paid and non-assessable and will conform to the
description of the Stock contained in the Prospectus; no
preemptive rights or other rights to subscribe for or purchase
exist with respect to the issuance and sale of the Shares by
the Company pursuant to this Agreement and the International
Underwriting Agreement; and no stockholder of the Company has
any right which has not been waived to require the Company to
register the sale of any shares owned by such stockholder
under the Act in the public offering contemplated by this
Agreement and the International Underwriting Agreement.
(i) The issue and sale of the Shares by
the Company hereunder and under the International Underwriting
Agreement and the compliance by the Company with all of the
provisions of this Agreement and the International
Underwriting Agreement and the consummation of the
transactions herein and therein contemplated will not conflict
with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company is a party or by which the
Company is bound or to which any of the property or assets of
the Company is subject, nor will such action result in any
violation of the provisions of the Certificate of
Incorporation or By-laws of the Company or any statute or any
order, rule or regulation of any court or governmental agency
or body having jurisdiction over the Company or any of its
properties; and no consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale
of the Shares or the consummation by the Company of the
transactions contemplated by this Agreement and the
International Underwriting Agreement, except the registration
under the Act of the Shares and such consents, approvals,
authorizations, registrations or qualifications as may be
required under state or foreign securities or Blue Sky laws in
connection with the purchase and distribution of the Shares by
the Underwriters and the International Underwriters;
(j) The Company is not in violation of
its Certificate of Incorporation or By-laws or in default in
any material respect in the performance or observance of any
obligation, agreement, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement, lease or
other agreement or instrument to which it is a party or by
which it or any of its properties may be bound;
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(k) The statements set forth in the
Prospectus under the caption "Description of Capital Stock",
insofar as they purport to constitute a summary of the terms
of the Stock are accurate and complete in all material
respects;
(l) Other than as set forth or
contemplated in the Prospectus, there are no legal or
governmental proceedings pending to which the Company a party
or of which any property of the Company is the subject which,
if determined adversely to the Company, would individually or
in the aggregate have a material adverse effect on the current
or future consolidated financial position, stockholders'
equity or results of operations of the Company; and, other
than as set forth or contemplated in the Prospectus, to the
best of the Company's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or
threatened by others;
(m) The Company is not and, after giving
effect to the offering and sale of the Shares, will not be an
"investment company" or an entity "controlled" by an
"investment company", as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment
Company Act");
(n) Price Waterhouse LLP, who have
certified certain financial statements of the Company, are
independent public accountants as required by the Act and the
rules and regulations of the Commission thereunder;
(o) The Company has no subsidiaries and
does not own or control, directly or indirectly, shares
of capital stock of any other corporation or any interest in
any partnership, joint venture, or other non-corporate
business entity or enterprise;
(p) Other than as set forth or
contemplated in the Prospectus, the Company has sufficient
interests or rights in all patents, patent licenses,
trademarks, servicemarks, trade names, copyrights, trade
secrets, information, proprietary rights and processes
("Intellectual Property") necessary for its business as now
conducted and, to the Company's knowledge, necessary in
connection with the products and services under development
and described in the Prospectus, without any conflict with or
infringement of the interests or rights of others; except as
disclosed in the Prospectus, the Company is not aware of
material outstanding options, licenses or agreements of any
kind relating to the Intellectual Property, and, except as
disclosed in the Prospectus, the Company is not a party to or
bound by any options licenses or agreements with respect to
the Intellectual Property of any other person or entity; none
of the technology employed by the Company has been obtained or
is being used by the Company in violation of any contractual
fiduciary obligation binding on the Company or any of its
executive officers or, to the Company's knowledge, any of its
employees or otherwise in violation of the rights of any
person; except as disclosed in the Prospectus, neither of the
Company nor any of its employees have received any written or,
to the Company's knowledge, oral communications alleging that
the Company has violated, infringed or conflicted with (and
knows of no such violation, infringement or conflict) or, by
conducting its business as proposed, would violate, infringe
or conflict with (and knows of no such violation, infringement
or conflict) any of the Intellectual Property of any other
person or
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entity; neither the execution nor delivery of this
Agreement, nor the operation of the Company's business by the
employees of the Company, nor the conduct of the Company's
business as proposed, will result in a breach or violation of
the terms, conditions or provisions of, or constitute a
default under, any material contract, covenant or instrument
known to the Company under which any of such employees is now
obligated; and the Company has taken and will maintain
reasonable measures to prevent the unauthorized dissemination
or publication of its confidential information and, to the
extent contractually required to do so, the confidential
information of third parties in its possession;
(q) The Company maintains insurance of
the types and in the amounts generally deemed adequate for its
business, including, but not limited to, insurance covering
real and personal property owned or leased by the Company
against theft, damage, destruction, acts of vandalism and all
other risks customarily insured against, all of which
insurance is in full force and effect;
(r) There are no contracts, other
documents or other agreements required to be described in the
Registration Statement or to be filed as exhibits to the
Registration Statement by the Act or by the rules and
regulations thereunder which have not been described or filed
as required; the contracts so described in the Prospectus are
in full force and effect on the date hereof; and neither the
Company nor, to the best of the Company's knowledge, any other
party is in breach of or default in any material respect under
any of such contracts;
(s) The Company has not been advised,
and has no reason to believe, that it is not conducting
business in compliance with all applicable laws, rules and
regulations of the jurisdictions in which it is conducting
business, including, without limitation, all applicable local,
state and federal environmental laws and regulations; except
where failure to be so in compliance would not materially
adversely affect the condition (financial or otherwise),
business, results of operations or prospects of the Company;
and
(t) The Company has obtained from the
persons and entities listed on _________ hereto the binding
agreement of each such person and entity that during the
period beginning from the date hereof and continuing to and
including the date 180 days after the date of the Prospectus,
not to offer, sell, contract to sell or otherwise dispose of
any securities of the Company that are substantially similar
to the Shares, including but not limited to any securities
that are convertible into or exchangeable for, or that
represent the right to receive, Stock or any such
substantially similar securities (other than pursuant to
employee or director stock option plans existing on, or upon
the conversion, exercise or exchange of convertible,
exercisable or exchangeable securities outstanding as of, the
date of this Agreement), without the Company's prior written
consent, which consent in no instance has been given or agreed
to be given and which consent in any instance will be given or
agreed to be given without your prior written consent.
2. Subject to the terms and conditions herein set forth, (a)
the Company agrees to issue and sell to each of the Underwriters, and each of
the Underwriters agrees, severally and not jointly, to purchase from the
Company, at a purchase price per share of $_____________ the number of Firm
Shares set forth opposite the name of such Underwriter in Schedule I hereto and
(b) in the event and to the extent that the Underwriters shall exercise the
election to purchase Optional Shares as provided below, the Company agrees to
issue and sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the Company, at the
purchase price per share set forth in clause (a) of this Section 2, that
portion of the number of Optional Shares as to
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which such election shall have been exercised (to be adjusted by you so as to
eliminate fractional shares) determined by multiplying such number of Optional
Shares by a fraction, the numerator of which is the maximum number of Optional
Shares which such Underwriter is entitled to purchase as set forth opposite the
name of such Underwriter in Schedule I hereto and the denominator of which is
the maximum number of Optional Shares that all of the Underwriters are entitled
to purchase hereunder.
The Company hereby grants to the Underwriters the right to
purchase at their election up to 600,000 Optional Shares, at the purchase price
per share set forth in the paragraph above, for the sole purpose of covering
over-allotments in the sale of the Firm Shares. Any such election to purchase
Optional Shares may be exercised only by written notice from you to the
Company, given within a period of 30 calendar days after the date of this
Agreement, setting forth the aggregate number of Optional Shares to be
purchased and the date on which such Optional Shares are to be delivered, as
determined by you but in no event earlier than the First Time of Delivery (as
defined in Section 4 hereof) or, unless you and the Company otherwise agree in
writing, earlier than two or later than ten business days after the date of
such notice.
3. Upon the authorization by you of the release of the Firm
Shares, the several Underwriters propose to offer the Firm Shares for sale upon
the terms and conditions set forth in the Prospectus.
4. (a) The Shares to be purchased by each Underwriter
hereunder, in definitive form, and in such authorized
denominations and registered in such names as Xxxxxxx, Xxxxx &
Co. may request upon at least forty-eight hours' prior notice
to the Company, shall be delivered by or on behalf of the
Company to Xxxxxxx, Sachs & Co., for the account of such
Underwriter, against payment by or on behalf of such
Underwriter of the purchase price therefor by certified or
official bank check or checks, payable to the order of the
Company in Federal (same day) funds. The Company will cause
the certificates representing the Shares to be made available
for checking and packaging at least twenty-four hours prior to
the Time of Delivery (as defined below) with respect thereto
at the office of Xxxxxxx, Xxxxx & Co., 00 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000 (the "Designated Office"). The time and
date of such delivery and payment shall be, with respect to
the Firm Shares, 9:30 a.m., New York City time, on
............., 1997 or such other time and date as Xxxxxxx,
Sachs & Co. and the Company may agree upon in writing, and,
with respect to the Optional Shares, 9:30 a.m., New York time,
on the date specified by Xxxxxxx, Xxxxx & Co. in the written
notice given by Xxxxxxx, Sachs & Co. of the Underwriters'
election to purchase such Optional Shares, or such other time
and date as Xxxxxxx, Xxxxx & Co. and the Company may agree
upon in writing. Such time and date for delivery of the Firm
Shares is herein called the "First Time of Delivery", such
time and date for delivery of the Optional Shares, if not the
First Time of Delivery, is herein called the "Second Time of
Delivery", and each such time and date for delivery is herein
called a "Time of Delivery".
(b) The documents to be delivered at each Time
of Delivery by or on behalf of the parties hereto pursuant to
Section 7 hereof, including the cross receipt for the Shares
and any additional documents requested by the Underwriters
pursuant to Section 7(k)
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hereof, will be delivered at the offices of Xxxx and Xxxx, The
Xxxxxxx Building, 0000 Xxxxxxxxxxxx Xxxxxx, X.X., Xxxxxxxxxx,
X.X. 00000 (the "Closing Location"), and the Shares will be
delivered at the Designated Office, all at such Time of
Delivery. A meeting will be held at the Closing Location at
4:00 p.m., New York City time, on the New York Business Day
next preceding such Time of Delivery, at which meeting the
final drafts of the documents to be delivered pursuant to the
preceding sentence will be available for review by the parties
hereto. For the purposes of this Section 4, "New York
Business Day" shall mean each Monday, Tuesday, Wednesday,
Thursday and Friday which is not a day on which banking
institutions in New York are generally authorized or obligated
by law or executive order to close.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form
approved by you and to file such Prospectus pursuant to Rule
424(b) under the Act not later than the Commission's close of
business on the second business day following the execution
and delivery of this Agreement, or, if applicable, such
earlier time as may be required by Rule 430A(a)(3) under the
Act; to make no further amendment or any supplement to the
Registration Statement or Prospectus which shall be
disapproved by you promptly after reasonable notice thereof;
to advise you, promptly after it receives notice thereof, of
the time when any amendment to the Registration Statement has
been filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed and to
furnish you with copies thereof; to advise you, promptly after
it receives notice thereof, of the issuance by the Commission
of any stop order or of any order preventing or suspending the
use of any Preliminary Prospectus or prospectus, of the
suspension of the qualification of the Shares for offering or
sale in any jurisdiction, of the initiation or threatening of
any proceeding for any such purpose, or of any request by the
Commission for the amending or supplementing of the
Registration Statement or Prospectus or for additional
information; and, in the event of the issuance of any stop
order or of any order preventing or suspending the use of any
Preliminary Prospectus or prospectus or suspending any such
qualification, promptly to use its best efforts to obtain the
withdrawal of such order;
(b) Promptly from time to time to take such
action as you may reasonably request to qualify the Shares for
offering and sale under the securities laws of such
jurisdictions as you may request and to comply with such laws
so as to permit the continuance of sales and dealings therein
in such jurisdictions for as long as may be necessary to
complete the distribution of the Shares, provided that in
connection therewith the Company shall not be required to
qualify as a foreign corporation or to file a general consent
to service of process in any jurisdiction;
(c) Prior to 10:00 a.m., New York time, on the
New York Business Day next succeeding the date of this
Agreement and from time to time, to furnish the Underwriters
with copies of the Prospectus in New York City in such
quantities as you may from time to time reasonably request,
and, if the delivery of a prospectus is required at any time
prior to the expiration of nine months after the time of issue
of the Prospectus in connection with the offering or sale of
the Shares and if at such time any event shall have occurred
as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material
fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances
under which they were made when such Prospectus is delivered,
not misleading, or, if for any other reason it shall be
necessary during such period to amend or supplement the
Prospectus in order to comply
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with the Act, to notify you and upon your request to prepare
and furnish without charge to each Underwriter and to any
dealer in securities as many copies as you may from time to
time reasonably request of an amended Prospectus or a
supplement to the Prospectus which will correct such statement
or omission or effect such compliance, and in case any
Underwriter is required to deliver a prospectus in connection
with sales of any of the Shares at any time nine months or
more after the time of issue of the Prospectus, upon your
request but at the expense of such Underwriter, to prepare and
deliver to such Underwriter as many copies as you may request
of an amended or supplemented Prospectus complying with
Section 10(a)(3) of the Act;
(d) If the Company elects to rely upon Rule
462(b), the Company shall file a Rule 462(b) Registration
Statement with the Commission in compliance with Rule 462(b)
by 10:00 p.m., Washington D.C. time, on the date of this
Agreement, and the Company shall at the time of filing of
either pay to the Commission the filing fee for the Rule
462(b) Registration Statement or give irrevocable instructions
for the payment of such fee pursuant to Rule 111(b) under the
Act;
(e) To make generally available to its
securityholders as soon as practicable, but in any event not
later than eighteen months after the effective date of the
Registration Statement (as defined in Rule 158(c) under the
Act), an earning statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of
the Act and the rules and regulations thereunder (including,
at the option of the Company, Rule 158);
(f) During the period beginning from the date
hereof and continuing to and including the date 180 days after
the date of the Prospectus, not to offer, sell, contract to
sell or otherwise dispose of, except as provided hereunder and
under the International Underwriting Agreement, any securities
of the Company that are substantially similar to the Shares,
including but not limited to any securities that are
convertible into or exchangeable for, or that represent the
right to receive, Stock or any such substantially similar
securities (other than pursuant to employee or director stock
option plans existing on, or upon the conversion, exercise or
exchange of convertible, exercisable or exchangeable
securities outstanding as of, the date of this Agreement),
without your prior written consent;
(g) To furnish to its stockholders as soon as
practicable after the end of each fiscal year an annual report
(including a balance sheet and statements of income,
stockholders' equity and cash flows of the Company and its
consolidated subsidiaries certified by independent public
accountants) and, as soon as practicable after the end of each
of the first three quarters of each fiscal year (beginning
with the fiscal quarter ending after the effective date of the
Registration Statement), consolidated summary financial
information of the Company and its subsidiaries for such
quarter in reasonable detail;
(h) During a period of five years from the
effective date of the Registration Statement, to furnish to
you copies of all reports or other communications (financial
or other) furnished to stockholders, and to deliver to you (i)
as soon as they are available,
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copies of any reports and financial statements furnished to or
filed with the Commission or any national securities exchange
on which any class of securities of the Company is listed; and
(ii) such additional information concerning the business and
financial condition of the Company as you may from time to
time reasonably request (such financial statements to be on a
consolidated basis to the extent the accounts of the Company
and its subsidiaries are consolidated in reports furnished to
its stockholders generally or to the Commission);
(i) To use the net proceeds received by it from
the sale of the Shares pursuant to this Agreement and the
International Underwriting Agreement in the manner specified
in the Prospectus under the caption "Use of Proceeds";
(j) To use its best efforts to list for
quotation the Shares on the Nasdaq National Market ("NASDAQ");
and
(k) During the period beginning from the date
hereof and continuing to and including the date 180 days after
the date of the Prospectus, not to allow or agree to allow any
person or entity referred to in clause (t) of Section 1 to
offer, sell, contract to sell or otherwise dispose of any
securities of the Company that are substantially similar to
the Shares, including but not limited to any securities that
are convertible into or exchangeable for, or that represent
the right to receive, Stock or any such substantially similar
securities (other than pursuant to employee or director stock
option plans existing on, or upon the conversion, exercise or
exchange of convertible, exercisable or exchangeable
securities outstanding as of, the date of this Agreement),
without your prior written consent.
6. The Company covenants and agrees with the several
Underwriters that the Company will pay or cause to be paid the following: (i)
the fees, disbursements and expenses of the Company's counsel and accountants
in connection with the registration of the Shares under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or producing
any Agreement among Underwriters, this Agreement, the International
Underwriting Agreement, the Agreement between Syndicates, the Selling
Agreement, closing documents (including compilations thereof) and any other
documents in connection with the offering, purchase, sale and delivery of the
Shares; (iii) all expenses in connection with the qualification of the Shares
for offering and sale under state securities laws as provided in Section 5(b)
hereof, including the fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky survey;
(iv) all fees and expenses in connection with listing the Shares on NASDAQ; (v)
the filing fees incident to, and the fees and disbursements of Xxxx and Xxxx,
as counsel for the Underwriters in connection with, securing any required
review by the National Association of Securities Dealers, Inc. of the terms of
the sale of the Shares; (vi) the cost of preparing stock certificates; (vii)
the cost and charges of any transfer agent or registrar; and (viii) all other
costs and expenses incident to the performance of its obligations hereunder
which are not otherwise specifically provided for in this Section. It is
understood, however, that, except as provided in this Section, and Sections 8
and 11 hereof, the Underwriters will pay all of their own costs and expenses,
including the fees of their counsel, stock transfer taxes on resale of any of
the Shares by them, and any advertising expenses connected with any offers they
may make.
7. The obligations of the Underwriters hereunder, as to the
Shares to be delivered at each Time of Delivery, shall be subject, in their
discretion, to the condition that all representations and warranties and other
statements of the Company herein are, at and as of such Time of Delivery, true
and correct, the condition that the Company shall have performed all of its
obligations hereunder
11
theretofore to be performed, and the following additional conditions:
(a) The Prospectus shall have been filed with
the Commission pursuant to Rule 424(b) within the applicable
time period prescribed for such filing by the rules and
regulations under the Act and in accordance with Section 5(a)
hereof; no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been
issued and no proceeding for that purpose shall have been
initiated or threatened by the Commission; and all requests
for additional information on the part of the Commission shall
have been complied with to your reasonable satisfaction; if
the Company has elected to rely upon Rule 462(b), the Rule
462(b) Registration Statement shall have become effective by
10:00 p.m., Washington, D.C. time, on the date of this
Agreement;
(b) Xxxx and Xxxx, counsel for the
Underwriters, shall have furnished to you such opinion or
opinions (a draft of such opinion is attached as Annex II(a)
hereto), dated such Time of Delivery, with respect to the
matters covered in paragraphs (i), (ii), (vi), (viii) and
(xii) of subsection (c) below as well as such other related
matters as you may reasonably request, and such counsel shall
have received such papers and information as they may
reasonably request to enable them to pass upon such matters;
(c) Xxxxx & Xxxxxxx L.L.P, counsel for the
Company, shall have furnished to you their written opinion (a
draft of such opinion is attached as Annex II(b) hereto),
dated such Time of Delivery, in form and substance
satisfactory to you, to the effect that:
(i) The Company was incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Delaware as of the date specified in such
opinion, with corporate power and corporate authority to own
its properties and conduct its business as described in the
Prospectus;
(ii) The Company has authorized capital
stock as set forth in the Prospectus, and all of the issued
shares of capital stock of the Company (including the Shares
being delivered at such Time of Delivery) have been duly and
validly authorized, and are validly issued, fully paid and
nonassessable; and the Shares in all material respects conform
to the description of the Stock contained in the Prospectus;
(iii) The Company has been duly qualified
as a foreign corporation for the transaction of business and
is in good standing under the laws of the State of Maryland;
(iv) Nothing has come to the attention
of such counsel that causes it to believe real property and
buildings held under lease by the Company are not held by it
under valid leases with such exceptions as are not material
and do not interfere with the use made and proposed to be made
of such property and buildings by the Company;
(v) This Agreement and the
International Underwriting Agreement have been duly
authorized, executed and delivered by the Company;
12
(vi) The issue and sale of the Shares
being delivered at such Time of Delivery by the Company and
the compliance by the Company with all of the provisions of
this Agreement and the International Underwriting Agreement as
of such Time of Delivery and the consummation as of such Time
of Delivery of the transactions herein and therein
contemplated do not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute
a default under, any agreement or instrument filed as an
exhibit to the Registration Statement, nor will such action
result in any violation of the provisions of the Certificate
of Incorporation or By-laws of the Company or any statute,
order, rule or regulation known to such counsel of any court
or governmental agency or body having jurisdiction over the
Company or any of its properties;
(vii) No consent, approval,
authorization, order, registration or qualification of or with
any such court or governmental agency or body having
jurisdiction over the Company or any of its properties is
required for the issue and sale of the Shares or the
consummation by the Company of the transactions contemplated
by this Agreement and the International Underwriting Agreement
as of the Time of Delivery, except the registration under the
Act of the Shares, and such consents, approvals,
authorizations, registrations or qualifications as may be
required under state or foreign securities or Blue Sky laws in
connection with the purchase and distribution of the Shares by
the Underwriters and the International Underwriters;
(viii) The statements set forth in the
Prospectus under the caption "Description of Capital Stock",
insofar as they purport to constitute a summary of the terms
of the Stock, under the caption "Certain U.S. Tax
Considerations Applicable to Non-U.S. Holders of the Common
Stock", insofar as they purport to describe the provisions of
the laws referred to therein, are accurate in all material
respects;
(ix) The Company is not an "investment
company" as such term is defined in the Investment Company
Act;
(x) To the best of such counsel's
knowledge, the Company has not issued any outstanding
securities convertible into or exchangeable for, or
outstanding options, warrants or other rights to purchase or
to subscribe for any shares or other securities of the
Company, except as described in the Prospectus;
(xi) No holder of outstanding shares of
capital stock of the Company has (i) any statutory preemptive
right under the Delaware General Corporation Law or, (ii) to
such counsel's knowledge and except as has been waived,
any contractual right to subscribe for any shares of
capital stock of the Company (including the Shares being
delivered at such Time of Delivery) (except that no opinion
need be expressed with respect to the specific matters that
are the subject of the legal proceedings disclosed in the
Prospectus under the caption "Business--Legal Proceedings") or
to have any common stock or other securities of the Company
included in the Registration Statement or the right, as a
result of the filing of the Registration Statement, to require
registration of any shares of Common Stock or other securities
of the Company; and
(xii) The Registration Statement and the
Prospectus and any further amendments and supplements thereto
made by the Company prior to such Time of Delivery (other than
the financial statements and notes thereto, financial
schedules and other financial data included therein, as to
which such counsel need express no opinion) comply as to form
in all material respects with the requirements of the Act and
the rules and
13
regulations thereunder.
In addition to the matters set forth above, such letter shall
also contain statements of such counsel to the effect that (i)
to such counsel's knowledge and other than as set forth in the
Prospectus, there are no legal or governmental proceedings
pending to which the Company is a party or of which any
property of the Company is the subject which, if determined
adversely to the Company could reasonably be expected
individually or in the aggregate to have a material adverse
effect on the financial condition or results of operations of
the Company, and, to such counsel's knowledge, no such
proceedings are threatened by governmental authorities or
threatened by others; (ii) while such counsel are not passing
upon and do not assume responsibility for, the accuracy,
completeness or fairness of the Registration Statement or the
Prospectus, except for those statements referred to in the
opinion in subsection (viii) of this Section 7(c), or any
further amendment or supplement thereto, based upon the
procedures referred to in such letter no facts have come to
the attention of such counsel which lead them to believe that,
as of its effective date, the Registration Statement or any
further amendment thereto made by the Company prior to such
Time of Delivery (other than the financial statements and
notes thereto, financial schedules and other financial data
included therein, as to which such counsel need express no
opinion) contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or
that, as of its date, the Prospectus or any further amendment
or supplement thereto made by the Company prior to such Time
of Delivery (other than the financial statements and notes
thereto, financial schedules and other financial data included
therein, as to which such counsel need express no opinion)
contained an untrue statement of a material fact or omitted to
state a material fact necessary to make the statements
therein, in the light of the circumstances under which they
were made, not misleading or that, as of such Time of
Delivery, the Prospectus or any further amendment or
supplement thereto made by the Company prior to such Time of
Delivery (other than the financial statements and notes
thereto, schedules and other financial data included therein,
as to which such counsel need express no opinion) contains an
untrue statement of a material fact or omits to state a
material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; and (iii) they do not know of any amendment to the
Registration Statement required to be filed or of any
contracts or other documents of a character required to be
filed as an exhibit to the Registration Statement or required
to be described in the Registration Statement or the
Prospectus which are not filed or described as required.
In rendering such opinion, such counsel may state that they
express no opinion as to the laws of any jurisdiction other than the Federal
laws of the United States, the laws of the State of Maryland, the contract law
of the State of New York and the General Corporation Law of the State of
Delaware.
(d) Xxxx Xxxx Xxxx & Friedenrich, special patent
counsel for the Company, shall have furnished its written
opinion to the Company, dated on or before such Time
of Delivery,
14
with respect to certain patent law matters.
(e) The Vice President and General Counsel of
the Company shall have furnished to you his written opinion (a
draft of such opinion is attached as Annex II(c) hereto),
dated such Time of Delivery, in form and substance
satisfactory to you, to the effect that:
(i) The Company is not in violation of
its Certificate of Incorporation or, in any material respect,
its By-Laws; and
(ii) To such counsel's knowledge and
other than as described in the Prospectus, there are no legal
or governmental proceedings pending to which the Company is a
party or of which any property of the Company is the subject;
and, to such counsel's knowledge, no such proceedings are
threatened by governmental authorities or by others.
(f) On the date of the Prospectus at a time
prior to the execution of this Agreement, at 9:30 a.m., New
York City time, on the effective date of any post-effective
amendment to the Registration Statement filed subsequent to
the date of this Agreement and also at each Time of Delivery,
Price Waterhouse LLP shall have furnished to you a letter or
letters, dated the respective dates of delivery thereof, in
form and substance satisfactory to you, to the effect set
forth in Annex I hereto (the executed copy of the letter
delivered prior to the execution of this Agreement is attached
as Annex I(a) hereto and a draft of the form of letter to be
delivered on the effective date of any post-effective
amendment to the Registration Statement and as of each Time of
Delivery is attached as Annex I(b) hereto;
(g) (i) The Company shall not have sustained
since the date of the latest audited financial statements
included in the Prospectus any loss or interference with its
business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus, and (ii)
since the respective dates as of which information is given in
the Prospectus there shall not have been any change in the
capital stock or long-term debt of the Company or any change,
or any development reasonably likely to result in a
prospective change, in or affecting the general affairs,
management, financial position, stockholders' equity or
results of operations of the Company, otherwise than as set
forth or contemplated in the Prospectus, the effect of which,
in any such case described in Clause (i) or (ii), is in the
judgment of the Representatives so material and adverse as to
make it impracticable or inadvisable to proceed with the
public offering or the delivery of the Shares being delivered
at such Time of Delivery on the terms and in the manner
contemplated in the Prospectus;
(h) On or after the date hereof there shall not
have occurred any of the following: (i) a suspension or
material limitation in trading in securities generally on the
New York Stock Exchange or on NASDAQ; (ii) a suspension or
material limitation in trading in the Company's securities on
NASDAQ; (iii) a general moratorium on commercial banking
activities declared by either Federal, New York State or
Maryland State authorities; or (iv) the outbreak or escalation
of hostilities involving the United States or the declaration
by the United States of a national emergency or war, if the
effect of any such event specified in this Clause (iv) in the
judgment of the Representatives makes it impracticable or
inadvisable
15
to proceed with the public offering or the delivery of the
Shares being delivered at such Time of Delivery on the terms
and in the manner contemplated in the Prospectus;
(i) The Shares to be sold at such Time of
Delivery shall have been duly approved for quotation on
NASDAQ;
(j) The Company has obtained and delivered to
the Underwriters executed copies of an agreement from
___________________________________, substantially to the
effect set forth in Subsection 5(f) hereof in form and
substance satisfactory to you;
(k) The Company shall have complied with the
provisions of Section 5(c) hereof with respect to furnishing
of Prospectuses on the New York Business Day next succeeding
the date of this Agreement; and
(l) The Company shall have furnished or caused
to be furnished to you at such Time of Delivery certificates
of officers of the Company satisfactory to you as to the
accuracy of the representations and warranties of the Company
herein at and as of such Time of Delivery, as to the
performance by the Company of all of its obligations hereunder
to be performed at or prior to such Time of Delivery, as to
the matters set forth in subsections (a) and (g) of this
Section and as to such other matters as you may reasonably
request.
8. (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 an untrue
statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein
not misleading, and will reimburse each Underwriter for any
legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any
such action or claim as such expenses are incurred; provided,
however, that the Company shall not be liable in any such case
to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in any
Preliminary Prospectus, the Registration Statement or the
Prospectus or any such amendment or supplement in reliance
upon and in conformity with written information furnished to
the Company by any Underwriter through Xxxxxxx, Xxxxx & Co.
expressly for use therein.
(b) Each Underwriter will indemnify and hold
harmless the Company against any losses, claims, damages or
liabilities to which the Company may become subject, under the
Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement
of a material fact contained in any Preliminary Prospectus,
the Registration Statement or the
16
Prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or
alleged omission was made in any Preliminary Prospectus, the
Registration Statement or the Prospectus or any such amendment
or supplement in reliance upon and in conformity with written
information furnished to the Company by such Underwriter
through Xxxxxxx, Sachs & Co. expressly for use therein; and
will reimburse the Company for any legal or other expenses
reasonably incurred by the Company in connection with
investigating or defending any such action or claim as such
expenses are incurred.
(c) Promptly after receipt by an indemnified
party under subsection (a) or (b) above of notice of the
commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the
indemnifying party in writing of the commencement thereof; but
the omission so to notify the indemnifying party shall not
relieve it from any liability which it may have to any
indemnified party otherwise than under such subsection. In
case any such action shall be brought against any indemnified
party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled
to participate therein and, to the extent that it shall wish,
jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel 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 shall not be liable to such
indemnified party under such subsection for any legal expenses
of other counsel or any other expenses, in each case
subsequently incurred by such indemnified party, in connection
with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the
written consent of the indemnified party, effect the
settlement or compromise of, or consent to the entry of any
judgment with respect to, any pending or threatened action or
claim in respect of which indemnification or contribution may
be sought hereunder (whether or not the indemnified party is
an actual or potential party to such action or claim) unless
such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does
not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any
indemnified party.
(d) If the indemnification provided for in this
Section 8 is unavailable to or insufficient to hold harmless
an indemnified party under subsection (a) or (b) above in
respect of any losses, claims, damages or liabilities (or
actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative
benefits received by
17
the Company on the one hand and the Underwriters on the other
from the offering of the Shares. If, however, the allocation
provided by the immediately preceding sentence is not
permitted by applicable law or if the indemnified party failed
to give the notice required under subsection (c) above, then
each indemnifying party shall contribute to such amount paid
or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but
also the relative fault of the Company on the one hand and the
Underwriters on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the
Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering of the
Shares purchased under this Agreement (before deducting
expenses) received by the Company bear to the total
underwriting discounts and commissions received by the
Underwriters with respect to the Shares purchased under this
Agreement, in each case as set forth in the table on the cover
page of the Prospectus. The relative fault shall be determined
by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to
information supplied by the Company on the one hand or the
Underwriters on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the
Underwriters agree that it would not be just and equitable if
contributions pursuant to this subsection (d) were determined
by pro rata allocation (even if the Underwriters were treated
as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable
considerations referred to above in this subsection (d). The
amount paid or payable by an indemnified party as a result of
the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above in this subsection (d)
shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection
with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the
Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which
such Underwriter has otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The
Underwriters' obligations in this subsection (d) to contribute
are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company under this
Section 8 shall be in addition to any liability which the
Company may otherwise have and shall extend, upon the same
terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations
of the Underwriters under this Section 8 shall be in addition
to any liability which the respective Underwriters may
otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company and to
each person, if any, who controls the Company within the
meaning of the Act.
9. (a) If any Underwriter shall default in its
obligation to purchase the Shares which it has agreed to
purchase hereunder at a Time of Delivery, you may in your
discretion arrange for you or another party or other parties
to purchase such Shares on the terms contained herein. If
within thirty-six hours after such default by any Underwriter
you do not arrange for the purchase of such Shares, then the
Company shall be entitled to a further period of thirty-six
hours within which to procure another party or other parties
satisfactory to you to purchase such Shares on such terms. In
the event that, within the respective prescribed periods, you
notify the Company that you have so arranged for the purchase
of such Shares, or the Company notifies you that it has so
arranged for the purchase of such
18
Shares, you or the Company shall have the right to postpone
such Time of Delivery for a period of not more than seven
days, in order to effect whatever changes may thereby be made
necessary in the Registration Statement or the Prospectus, or
in any other documents or arrangements, and the Company agrees
to file promptly any amendments to the Registration Statement
or the Prospectus which in your opinion may thereby be made
necessary. The term "Underwriter" as used in this Agreement
shall include any person substituted under this Section with
like effect as if such person had originally been a party to
this Agreement with respect to such Shares.
(b) If, after giving effect to any arrangements
for the purchase of the Shares of a defaulting Underwriter or
Underwriters by you and the Company as provided in subsection
(a) above, the aggregate number of such Shares which remains
unpurchased does not exceed one-eleventh of the aggregate
number of all the Shares to be purchased at such Time of
Delivery, then the Company shall have the right to require
each non-defaulting Underwriter to purchase the number of
Shares which such Underwriter agreed to purchase hereunder at
such Time of Delivery and, in addition, to require each
non-defaulting Underwriter to purchase its pro rata share
(based on the number of Shares which such Underwriter agreed
to purchase hereunder) of the Shares of such defaulting
Underwriter or Underwriters for which such arrangements have
not been made; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
(c) If, after giving effect to any arrangements
for the purchase of the Shares of a defaulting Underwriter or
Underwriters by you and the Company as provided in subsection
(a) above, the aggregate number of such Shares which remains
unpurchased exceeds one-eleventh of the aggregate number of
all the Shares to be purchased at such Time of Delivery, or if
the Company shall not exercise the right described in
subsection (b) above to require non-defaulting Underwriters to
purchase Shares of a defaulting Underwriter or Underwriters,
then this Agreement (or, with respect to the Second Time of
Delivery, the obligations of the Underwriters to purchase and
of the Company to sell the Optional Shares) shall thereupon
terminate, without liability on the part of any non-defaulting
Underwriter or the Company, except for the expenses to be
borne by the Company and the Underwriters as provided in
Section 6 hereof and the indemnity and contribution agreements
in Section 8 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations,
warranties and other statements of the Company and the several Underwriters, as
set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless
of any investigation (or any statement as to the results thereof) made by or on
behalf of any Underwriter or any controlling person of any Underwriter, or the
Company, or any officer or director or controlling person of the Company, and
shall survive delivery of and payment for the Shares.
11. If this Agreement shall be terminated pursuant to Section
9 hereof, the Company shall not then be under any liability to any Underwriter
except as provided in Sections 6 and 8 hereof; but, if for any other reason,
any Shares are not delivered by or on behalf of the Company as provided herein,
the Company will reimburse the Underwriters through you for all out-of-pocket
expenses approved in writing by you, including fees and disbursements of
counsel, reasonably incurred by the Underwriters in making preparations for the
purchase, sale and delivery of the Shares not so delivered, but the Company
shall then be under no further liability to any Underwriter in respect of the
Shares not so delivered except as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of
each of the Underwriters, and the
19
parties hereto shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of any Underwriter made or given by you jointly
or by Xxxxxxx, Xxxxx & Co. on behalf of you as the representatives.
All statements, requests, notices and agreements hereunder
shall be in writing, and if to the Underwriters shall be delivered or sent by
mail, telex or facsimile transmission to you as the representatives in care of
Xxxxxxx, Sachs & Co., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Registration Department; and if to the Company shall be delivered or sent by
mail, telex or facsimile transmission to the address of the Company set forth
in the Registration Statement, Attention: Secretary; provided, however, that
any notice to an Underwriter pursuant to Section 8(c) hereof shall be delivered
or sent by mail, telex or facsimile transmission to such Underwriter at its
address set forth in its Underwriters' Questionnaire, or telex constituting
such Questionnaire, which address will be supplied to the Company by you upon
request. Any such statements, requests, notices or agreements shall take
effect at the time of receipt thereof.
13. This Agreement shall be binding upon, and inure solely to
the benefit of, the Underwriters, the Company and, to the extent provided in
Sections 8 and 10 hereof, the officers and directors of the Company and each
person who controls the Company or any Underwriter, and their respective heirs,
executors, administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement. No purchaser
of any of the Shares from any Underwriter shall be deemed a successor or assign
by reason merely of such purchase.
14. Time shall be of the essence of this Agreement. As used
herein, the term "business day" shall mean any day when the Commission's office
in Washington, D.C., is open for business.
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement may be executed by any one or more of the
parties hereto in any number of counterparts, each of which shall be deemed to
be an original, but all such counterparts shall together constitute one and the
same instrument.
20
If the foregoing is in accordance with your understanding,
please sign and return to us one for the Company and for each of the
Representatives plus one for each counsel counterparts hereof, and upon the
acceptance hereof by you, on behalf of each of the Underwriters, this letter
and such acceptance hereof shall constitute a binding agreement between each of
the Underwriters and the Company. It is understood that your acceptance of
this letter on behalf of each of the Underwriters is pursuant to the authority
set forth in a form of Agreement among Underwriters (U.S. Version), the form of
which shall be submitted to the Company for examination upon request, but
without warranty on your part as to the authority of the signers thereof.
Very truly yours,
CIENA Corporation
By:
------------------------------
Xxxxxxx X. Xxxxxxx
President
Accepted as of the date hereof:
Xxxxxxx, Sachs & Co.
Alex. Xxxxx & Sons Incorporated
Xxxxxxx, Xxxxxx & Xxxxxxxxx, L.L.C.
Xxxxxxx X. Xxxxxxxx & Company
By:
-----------------------------
(Xxxxxxx, Xxxxx & Co.)
On behalf of each of the Underwriters
21
SCHEDULE I
NUMBER OF OPTIONAL
SHARES TO BE
TOTAL NUMBER OF PURCHASED IF
FIRM SHARES MAXIMUM OPTION
TO BE PURCHASED EXERCISED
--------------- -----------------
UNDERWRITER
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Xxxxxxx, Sachs & Co. . . . . . . . . . . . . . . . . . . . . . .
Alex. Xxxxx & Sons Incorporated . . . . . . . . . . . . . . . . .
Xxxxxxx, Xxxxxx & Xxxxxxxxx, L.L.C. . . . . . . . . . . . . . . .
Xxxxxxx X. Xxxxxxxx & Company . . . . . . . . . . . . . . . . . .
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Total . . . . . . . . . . . . . . . . . . . . . .
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22
ANNEX I
DESCRIPTION OF COMFORT LETTER
Pursuant to Section 7(e) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public
accountants with respect to the Company within the meaning of
the Act and the applicable published rules and regulations
thereunder;
(ii) In their opinion, the financial statements
and any supplementary financial information and schedules
(and, if applicable, financial forecasts and/or pro forma
financial information) examined by them and included in the
Prospectus or the Registration Statement comply as to form in
all material respects with the applicable accounting
requirements of the Act and the related published rules and
regulations thereunder; and, if applicable, they have made a
review in accordance with standards established by the
American Institute of Certified Public Accountants of the
unaudited consolidated interim financial statements, selected
financial data, pro forma financial information, financial
forecasts and/or condensed financial statements derived from
audited financial statements of the Company for the periods
specified in such letter, as indicated in their reports
thereon, copies of which have been furnished separately to the
representatives of the Underwriters (the "Representatives")
and are attached hereto;
(iii) They have made a review in accordance with
standards established by the American Institute of Certified
Public Accountants of the unaudited condensed consolidated
statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the
Prospectus as indicated in their reports thereon copies of
which are attached hereto and on the basis of specified
procedures including inquiries of officials of the Company who
have responsibility for financial and accounting matters
regarding whether the unaudited condensed consolidated
financial statements referred to in paragraph (vi)(A)(i) below
comply as to form in all material respects with the applicable
accounting requirements of the Act and the related published
rules and regulations, nothing came to their attention that
caused them to believe that the unaudited condensed
consolidated financial statements do not comply as to form in
all material respects with the applicable accounting
requirements of the Act and the related published rules and
regulations;
(iv) The unaudited selected financial information
with respect to the consolidated results of operations and
financial position of the Company for the five most recent
fiscal years included in the Prospectus agrees with the
corresponding amounts (after restatements where applicable) in
the audited consolidated financial statements for such five
fiscal years;
(v) They have compared the information in the
Prospectus under selected captions with the disclosure
requirements of Regulation S-K and on the basis of limited
procedures specified in such letter nothing came to their
attention as a result of the foregoing procedures that caused
them to believe that this information does not conform in all
material respects with the disclosure requirements of Items
301, 302, 402 and 503(d), respectively, of Regulation S-K;
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(vi) On the basis of limited procedures, not
constituting an examination in accordance with generally
accepted auditing standards, consisting of a reading of the
unaudited financial statements and other information referred
to below, a reading of the latest available interim financial
statements of the Company, inspection of the minute books of
the Company and its subsidiaries since the date of the latest
audited financial statements included in the Prospectus,
inquiries of officials of the Company responsible for
financial and accounting matters and such other inquiries and
procedures as may be specified in such letter, nothing came to
their attention that caused them to believe that:
(A) (i) the unaudited consolidated statements of
income, consolidated balance sheets and consolidated
statements of cash flows included in the Prospectus do not
comply as to form in all material respects with the applicable
accounting requirements of the Act and the related published
rules and regulations, or (ii) any material modifications
should be made to the unaudited condensed consolidated
statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the
Prospectus for them to be in conformity with generally
accepted accounting principles;
(B) any other unaudited income statement data and
balance sheet items included in the Prospectus do not agree
with the corresponding items in the unaudited consolidated
financial statements from which such data and items were
derived, and any such unaudited data and items were not
determined on a basis substantially consistent with the basis
for the corresponding amounts in the audited consolidated
financial statements included in the Prospectus;
(C) the unaudited financial statements which were
not included in the Prospectus but from which were derived any
unaudited condensed financial statements referred to in Clause
(A) and any unaudited income statement data and balance sheet
items included in the Prospectus and referred to in Clause (B)
were not determined on a basis substantially consistent with
the basis for the audited consolidated financial statements
included in the Prospectus;
(D) any unaudited pro forma consolidated
condensed financial statements included in the Prospectus do
not comply as to form in all material respects with the
applicable accounting requirements of the Act and the
published rules and regulations thereunder or the pro forma
adjustments have not been properly applied to the historical
amounts in the compilation of those statements;
(E) as of a specified date not more than five
days prior to the date of such letter, there have been any
changes in the consolidated capital stock (other than
issuances of capital stock upon exercise of options and stock
appreciation rights, upon earn-outs of performance shares and
upon conversions of convertible securities, in each case which
were outstanding on the date of the latest financial
statements included in the Prospectus) or any increase in the
consolidated long-term debt of the Company, or any decreases
in consolidated net current assets or stockholders' equity or
other items specified by the Representatives, or any increases
in any items specified by the Representatives, in each case as
compared with amounts shown in the latest balance sheet
included in the Prospectus, except in each case for changes,
increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter;
and
(F) for the period from the date of the latest
financial statements included in the Prospectus to the
specified date referred to in Clause (E) there were any
decreases in
24
consolidated net revenues or operating profit or the total or
per share amounts of consolidated net income or other items
specified by the Representatives, or any increases in any
items specified by the Representatives, in each case as
compared with the comparable period of the preceding year and
with any other period of corresponding length specified by the
Representatives, except in each case for decreases or
increases which the Prospectus discloses have occurred or may
occur or which are described in such letter; and
(vii) In addition to the examination referred to in
their report(s) included in the Prospectus and the limited
procedures, inspection of minute books, inquiries and other
procedures referred to in paragraphs (iii) and (vi) above,
they have carried out certain specified procedures, not
constituting an examination in accordance with generally
accepted auditing standards, with respect to certain amounts,
percentages and financial information specified by the
Representatives, which are derived from the general accounting
records of the Company, which appear in the Prospectus, or in
Part II of, or in exhibits and schedules to, the Registration
Statement specified by the Representatives, and have compared
certain of such amounts, percentages and financial information
with the accounting records of the Company and have found them
to be in agreement.
25
ANNEX I(a)
COMFORT LETTER DELIVERED PRIOR TO EXECUTION OF THIS AGREEMENT
26
ANNEX I(b)
UPDATED COMFORT LETTER
27
ANNEX II(a)
OPINION OF UNDERWRITERS COUNSEL
28
ANNEX II(b)
OPINION OF COMPANY COUNSEL
29
ANNEX II(c)
OPINION OF GENERAL COUNSEL
