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Exhibit 1
1,490,000 SHARES(1)
DATA TRANSLATION, INC.
COMMON STOCK
PURCHASE AGREEMENT
November ___, 1995
XXXXX XXXXXXX INC.
Xxxxx Xxxxxxx Tower
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
XXXXXXXXX & XXXXX
00 Xxxxx Xxxxx
0xx Xxxxx
Xxxxxx, XX 00000
Ladies and Gentlemen:
Data Translation, Inc., a Massachusetts corporation (the "Company"),
and the stockholders of the Company listed in Schedule I hereto (the "Selling
Stockholders") severally propose to sell to Xxxxx Xxxxxxx Inc. and Xxxxxxxxx &
Xxxxx LLC (the "Underwriters") an aggregate of 1,490,000 shares (the "Firm
Shares") of Common Stock, $0.01 par value (the "Common Stock"), of the Company.
The Firm Shares consist of 1,400,000 authorized but unissued shares of Common
Stock to be issued and sold by the Company and 90,000 outstanding shares of
Common Stock to be sold by the Selling Stockholders. The Company has also
granted to the Underwriters options to purchase in the aggregate up to 223,500
additional shares of Common Stock, on the terms and for the purposes set forth
in Section 3 hereof (the "Option Shares"). The Firm Shares and the Option Shares
purchased pursuant to this Purchase Agreement are herein collectively called the
"Securities."
The Company and the Selling Stockholders hereby confirm their agreement
with respect to the sale of the Securities to the Underwriters.
1. Registration Statement. A registration statement on Form S-1 (File
No. 33-_______) with respect to the Securities, including a preliminary form of
prospectus, including the exhibits, financial statements and schedules each as
amended by one or more amendments at the time the registration statement becomes
effective, has been prepared by the Company in conformity with the requirements
of the Securities Act of 1933, as amended (the "Act"), and the rules and
regulations ("Rules and Regulations") of the Securities and Exchange Commission
(the "Commission") thereunder and has been filed with the Commission or will be
so filed. Copies of such registration statement with amendments with each
related
(1) PLUS AN OPTION TO PURCHASE UP TO 223,500 ADDITIONAL SHARES TO COVER
OVER-ALLOTMENTS.
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preliminary prospectus have been delivered to you.
If the Company has elected not to rely upon Rule 430A of the Rules and
Regulations, the Company has prepared and will promptly file an amendment to the
registration statement and an amended prospectus. If the Company has elected to
rely upon Rule 430A of the Rules and Regulations, it will prepare and file a
prospectus pursuant to Rule 424(b) that discloses the information previously
omitted from the prospectus in reliance upon Rule 430A. Such registration
statement as amended at the time it is or was declared effective by the
Commission, and, in the event of any amendment thereto after the effective date
and prior to the First Closing Date (as hereinafter defined), such registration
statement as so amended (but only from and after the effectiveness of such
amendment), including the information deemed to be part of the registration
statement at the time of effectiveness pursuant to Rule 430A(b), if applicable,
is hereinafter called the "Registration Statement." The prospectus included in
the Registration Statement at the time it is or was declared effective by the
Commission is hereinafter called the "Prospectus," except that if any prospectus
filed by the Company with the Commission pursuant to Rule 424(b) of the Rules
and Regulations or any other prospectus provided to the Underwriters by the
Company for use in connection with the offering of the Securities (whether or
not required to be filed by the Company with the Commission pursuant to Rule
424(b) of the Rules and Regulations) differs from the prospectus on file at the
time the Registration Statement is or was declared effective by the Commission,
the term "Prospectus" shall refer to such differing prospectus from and after
the time such prospectus is filed with the Commission or transmitted to the
Commission for filing pursuant to such Rule 424(b) or from and after the time it
is first provided to the Underwriters by the Company for such use. The term
"Preliminary Prospectus" as used herein means any preliminary prospectus
included in the Registration Statement and distributed prior to the time it
becomes or became effective under the Act and any prospectus subject to
completion as described in Rule 430A of the Rules and Regulations.
2. Representations and Warranties of the Company and the Selling
Stockholders.
(a) The Company represents and warrants to, and agrees with,
the Underwriters as follows:
(i) 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, 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; except that the foregoing shall not apply to statements
in or omissions from any Preliminary Prospectus in reliance upon, and
in conformity with, written information furnished to the Company by
you, specifically for use in the preparation thereof.
(ii) As of the time the Registration Statement (or any
post-effective
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amendment thereto) is or was declared effective by the Commission, upon
the filing or first delivery to the Underwriters of the Prospectus (or
any supplement to the Prospectus) and at the First Closing Date and
Second Closing Date (as hereinafter defined), (A) the Registration
Statement and Prospectus will conform or conformed in all material
respects to the requirements of the Act and the Rules and Regulations,
(B) the Registration Statement will not or did not include an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading, and (C) the Prospectus will not or did not include an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances in which they are or were made,
not misleading; except that the foregoing shall not apply to statements
in or omissions from any such document in reliance upon, and in
conformity with, written information furnished to the Company by you,
specifically for use in the preparation thereof. If the Registration
Statement has been declared effective by the Commission, no stop order
suspending the effectiveness of the Registration Statement has been
issued, and no proceeding for that purpose has been initiated or, to
the Company's knowledge, threatened by the Commission.
(iii) The financial statements of the Company, together with
the notes thereto, set forth in the Registration Statement and
Prospectus comply in all material respects with the requirements of the
Act and fairly present the financial condition of the Company as of the
dates indicated and the results of operations and changes in
stockholders equity and cash flows for the periods therein specified in
conformity with generally accepted accounting principles as in effect
in the United States consistently applied throughout the periods
involved (except as otherwise stated therein); and the supporting
schedules included in the Registration Statement present fairly the
information required to be stated therein. No other financial
statements or schedules are required to be included in the Registration
Statement or Prospectus. Xxxxxx Xxxxxxxx LLP, who have expressed their
opinion with respect to the financial statements and schedules filed as
a part of the Registration Statement and included in the Registration
Statement and Prospectus, are independent public accountants as
required by the Act and the Rules and Regulations.
(iv) Each of the Company and its subsidiaries has been duly
organized and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation. Each of the
Company and its subsidiaries has full corporate power and authority to
own, lease and operate its properties and conduct its business as
currently being carried on and as described in the Registration
Statement and Prospectus, and is duly qualified to do business as a
foreign corporation in good standing in each domestic and foreign
jurisdiction in which it owns or leases real property or in which the
conduct of its business makes such qualification necessary and in which
the failure to so qualify would have a material adverse effect upon the
business, financial condition
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or properties of the Company and its subsidiaries, taken as a whole.
(v) Except as contemplated in the Prospectus, subsequent to the
respective dates as of which information is given in the Registration
Statement and the Prospectus, neither the Company nor any of its
subsidiaries other than in the ordinary course has incurred any
material liabilities or obligations, direct or contingent, or entered
into any material transactions, or declared or paid any dividends or
made any distribution of any kind with respect to its capital stock,
except as contemplated in the Prospectus and Registration Statement and
there has not other than in the ordinary course been any change in the
capital stock (other than a change in the number of outstanding shares
of Common Stock due to the issuance of shares upon the exercise of
outstanding options or warrants), or any material change in the
short-term or long-term debt, or any issuance of options, warrants,
convertible securities or other rights to purchase the capital stock,
of the Company or any of its subsidiaries, or any material adverse
change, or any development reasonably likely to involve a prospective
material adverse change, in the general affairs, condition (financial
or otherwise), business, key personnel, property, prospects, net worth
or results of operations of the Company and its subsidiaries, taken as
a whole.
(vi) Except as set forth in the Prospectus, there is not
pending or, to the knowledge of the Company, threatened or
contemplated, any action, suit or proceeding to which the Company or
any of its subsidiaries or, to the best knowledge of the Company after
due inquiry, any of its officers, is a party before or by any domestic
or foreign court or governmental agency, authority or body, or any
arbitrator, which might result in any material adverse change in the
condition (financial or otherwise), business, prospects, net worth, or
results of operations of the Company and its subsidiaries, taken as a
whole, or prevent the consummation of the transactions contemplated
hereby.
(vii) There are no contracts or documents of the Company or any
of its subsidiaries that are required to be described in the Prospectus
or filed as exhibits to the Registration Statement by the Act or by the
Rules and Regulations that have not been accurately described in all
material respects or so filed.
(viii) This Agreement has been duly authorized, executed and
delivered by the Company, and constitutes a valid, legal and binding
obligation of the Company, enforceable against the Company in
accordance with its terms, except as rights to indemnity and
contribution hereunder may be limited by federal or state securities
laws and except as such enforceability against the Company may be
limited by bankruptcy, insolvency, reorganization or similar laws
affecting the rights of creditors generally and subject to general
principles of equity. The execution, delivery and performance of this
Agreement and the consummation of the transactions herein contemplated
in each case by the Company will not result in a breach or violation of
any of the terms and
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provisions of, or constitute a default under, any statute, any material
agreement or instrument to which the Company is a party or by which it
is bound or to which any of its property is subject, the Company's
Articles of Organization or by-laws, or any order, rule, regulation or
decree of any court or governmental agency or body having jurisdiction
over the Company or any of its properties, provided, that the foregoing
shall not be deemed to refer to blue sky or state securities laws or
regulations applicable to the public offering of Common Stock by the
Underwriters contemplated hereby ("Blue Sky Laws") or to the by-laws or
rules of the National Association of Securities Dealers, Inc. ("NASD")
relating to the corporate financing arrangements applicable to the
transactions contemplated hereby. No consent, approval, authorization
or order of, or filing with, any court or governmental agency or body
is required for the execution, delivery and performance of this
Agreement or for the consummation of the transactions contemplated
hereby, including the issuance or sale of the Securities by the
Company, except such as may be required under the Act, any Blue Sky
Law, or the by-laws or rules of the NASD relating to the corporate
financing arrangements, and the Company has full power and authority to
enter into this Agreement and to authorize, issue and sell the
Securities as contemplated by this Agreement.
(ix) All of the issued and outstanding shares of capital stock
of the Company, including the outstanding shares of Common Stock, are
duly authorized and validly issued, fully paid and nonassessable, have
been issued in compliance with all federal and state securities laws,
were not issued in violation of or subject to any preemptive rights or
other rights to subscribe for or purchase securities; the Securities
which may be sold hereunder by the Company have been duly authorized
and, when issued, delivered and paid for in accordance with the terms
hereof, will have been validly issued and will be fully paid and
nonassessable, and the capital stock of the Company, including the
Common Stock, conforms in all material respects to the description
thereof in the Registration Statement and Prospectus. Except as
otherwise stated in the Registration Statement and Prospectus, there
are no preemptive rights or other rights to subscribe for or to
purchase, or any restriction upon the voting or transfer of, any shares
of Common Stock pursuant to the Company's Articles of Organization,
by-laws or any agreement or other instrument to which the Company is a
party or by which the Company is bound. Except as described in the
Prospectus, neither the filing of the Registration Statement nor the
offering or sale of the Securities as contemplated by this Agreement
gives rise to any rights for or relating to the registration of any
shares of Common Stock or other securities of the Company. All of the
issued and outstanding shares of capital stock of each of the Company's
subsidiaries have been duly authorized and validly issued and are fully
paid and nonassessable, and, except as otherwise described in the
Registration Statement and Prospectus and except for any directors'
qualifying shares, the Company owns of record and beneficially, free
and clear of any security interests, claims, liens, proxies, equities
or other encumbrances, all of the issued and outstanding shares of such
stock. Except as described in the Registration
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Statement and the Prospectus or issued pursuant to the Company's 1986
Employee Stock Purchase Plan, Key Employee Incentive Plan (1980), Key
Employee Incentive Plan (1982) or Key Employee Incentive Plan (1992),
there are no options, warrants, agreements, contracts or other rights
in existence to purchase or acquire from the Company or any subsidiary
of the Company any shares of the capital stock of the Company or any
subsidiary of the Company. The Company has an authorized and
outstanding capitalization as of respective the date set forth in the
Registration Statement and the Prospectus as set forth in the
Registration Statement and the Prospectus, respectively.
(x) The Company and each of its subsidiaries holds, and is
operating in compliance with, all franchises, grants, authorizations,
licenses, permits, easements, consents, certificates and orders of any
governmental or self-regulatory body required for the conduct of its
business and all such franchises, grants, authorizations, licenses,
permits, easements, consents, certifications and orders are valid and
in full force and effect; and the Company and each of its subsidiaries
is in compliance with all applicable federal, state, local and foreign
laws, regulations, orders and decrees, except, in any of the foregoing
cases, where the failure be so in compliance would not have a material
adverse effect on the business, condition (financial or otherwise),
prospects, net worth or results of operations of the Company and its
subsidiaries, taken as a whole.
(xi) The Company and its subsidiaries have good and marketable
title to all property and assets described in the Registration
Statement and Prospectus as being owned by them, in each case free and
clear of all liens, claims, security interests or other encumbrances
except such as (i) are described in the Registration Statement and the
Prospectus or (ii) do not materially adversely affect the business,
condition (financial or otherwise), prospects, net worth or results of
operations of the Company and its subsidiaries, taken as a whole; the
property held under lease by the Company and its subsidiaries is held
by them under valid, subsisting and enforceable leases with only such
exceptions with respect to any particular lease as do not interfere in
any material respect with the conduct of the business of the Company or
its subsidiaries, taken as a whole.
(xii) The Company and each of its subsidiaries owns or
possesses adequate rights to use all patents, patent applications,
trademarks, service marks, trade names, trademark registrations,
service xxxx registrations, copyrights, licenses, inventions, know-how,
trade secrets and rights ("Intellectual Property") necessary for the
conduct of the business of the Company and its subsidiaries as
currently carried on and as described in the Registration Statement and
Prospectus, including the Intellectual Property described or referred
to in the Prospectus as being owned or used by the Company or any
subsidiary. Except as stated in the Registration Statement and
Prospectus or as disclosed to you in a letter from the Company dated
November __,
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1995, no activity engaged in by or aspect of the business of the
Company or any of its subsidiaries uses or involves or gives rise to
any infringement of, or license or similar fees for, any Intellectual
Property or other similar rights of others, which infringements or fees
are materially adverse to the business or prospects of the Company and
its subsidiaries, taken as a whole, and neither the Company nor any of
its subsidiaries has received any notice alleging any such infringement
or that any such fee is due. To the knowledge of the Company, no prior
employer of any employee of the Company or any of its subsidiaries has
any right to or interest in any inventions, improvements, discoveries
or other information assigned to the Company or any of its subsidiaries
and material to the conduct of the business of the Company and its
subsidiaries, taken as a whole, as currently conducted and as currently
proposed to be conducted.
(xiii) Neither the Company nor any of its subsidiaries is in
violation of its respective charter or by-laws or in breach of or
otherwise in default in the performance of any material obligation,
agreement or condition contained in any bond, debenture, note,
indenture, loan agreement or any other material contract, lease or
other instrument to which it is subject or by which any of them may be
bound, or to which any of the material property or assets of the
Company or any of its subsidiaries is subject, which violation or
default would have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(xiv) The Company and its subsidiaries have filed all federal,
state, local and foreign income and franchise tax returns required to
be filed (or filed for extensions thereof) and are not in default in
the payment of any taxes which were payable pursuant to said returns or
any assessments with respect thereto, other than any which the Company
or any of its subsidiaries is contesting in good faith, or where the
failure to timely file such return or pay such taxes would not have a
material adverse effect on the business, condition (financial or
otherwise), prospects, net worth or results of operations of the
Company and its subsidiaries, taken as a whole.
(xv) The Company has not distributed and will not distribute
any prospectus or other offering material in connection with the
offering and sale of the Securities other than any Preliminary
Prospectus or the Prospectus or other materials permitted by the Act.
(xvi) The Securities have been approved for designation subject
to notice of issuance, on the National Market System of the National
Association of Securities Dealers Automated Quotation System
("NASDAQ").
(xvii) Other than the stock of the subsidiaries of the Company
listed in Exhibit 21.1 to the Registration Statement and securities of
entities in which the Company holds a passive investment representing a
less than five (5) percent beneficial interest in such entity, the
Company owns no capital stock or other equity or ownership
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or proprietary interest in any corporation, partnership, association,
trust or other entity.
(xviii) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences.
(xix) Other than as contemplated by this Agreement, the Company
has not incurred any liability for any finder's or broker's fee or
agent's commission in connection with the execution and delivery of
this Agreement or the consummation of the transactions contemplated
hereby.
(xx) Neither the Company nor any of its affiliates is presently
doing business with the government of Cuba or with any person or
affiliate located in Cuba.
(xxi) The Company and its subsidiaries maintain insurance of
the types and in the amounts reasonably deemed by the Company to be
adequate for their respective businesses and to be consistent with
insurance coverage maintained by similar companies in similar business,
including, but not limited to, insurance covering real and personal
property owned or leased by the Company or any subsidiary against
theft, damage, destruction, acts of vandalism and all other risks
customarily insured against, all of which insurance is in full force
and effect.
(xxii) The Company and its subsidiaries are not involved in any
labor dispute or disturbance nor, to the knowledge of the Company, is
any such dispute or disturbance threatened.
(xxiii) The operations of the subsidiaries of the Company
(other than Data Translation Networking Ltd.) are not in the aggregate
material to the operations of the Company and its subsidiaries taken as
a whole.
(b) Each Selling Stockholder severally and not jointly
represents and warrants to, and agrees with, the Underwriters as follows:
(i) Such Selling Stockholder is the record and beneficial owner
of, and has, and on the First Closing Date and/or the Second Closing
Date, as the case may be, will have, good, valid and marketable title
to the Securities to be sold by such Selling Stockholder, free and
clear of all security interests, claims, liens, restrictions on
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transferability, legends, proxies, equities or other encumbrances; and
upon delivery of and payment for such Securities hereunder, the
Underwriters will acquire valid and marketable title thereto, free and
clear of any security interests, claims, liens, restrictions on
transferability, legends, proxies, equities or other encumbrances. Such
Selling Stockholder is selling the Securities to be sold by such
Selling Stockholder for such Selling Stockholder's own account, and no
part of the proceeds of such sale received by such Selling Stockholder
will inure, either directly or indirectly, to the benefit of the
Company other than as described in the Registration Statement and
Prospectus.
(ii) Such Selling Stockholder has duly authorized, executed and
delivered a Power of Attorney and Custody Agreement ("Custody
Agreement"), which Custody Agreement is a valid and binding obligation
of such Selling Stockholder, to The First National Bank of Boston, as
Custodian (the "Custodian"); pursuant to the Custody Agreement the
Selling Stockholder has placed in custody with the Custodian, for
delivery under this Agreement, the certificates representing the
Securities to be sold by such Selling Stockholder; and such
certificates were duly and properly endorsed in blank for transfer, or
were accompanied by all documents duly and properly executed that are
necessary to effect the transfer to the Underwriters of title thereto,
free of any legend, restriction on transferability, proxy, lien or
claim, whatsoever.
(iii) Such Selling Stockholder has the power and authority to
enter into this Agreement and to sell, transfer and deliver the
Securities to be sold by such Selling Stockholder; and such Selling
Stockholder has duly authorized, executed and delivered to Xxxxx X.
Xxxx, as attorney-in-fact (the "Attorney-in-Fact"), an irrevocable
power of attorney (a "Power of Attorney") authorizing and directing
the Attorney-in-Fact, or any of them, to effect the sale and delivery
of the Securities being sold by such Selling Stockholder, to enter
into this Agreement and to take all such other action as may be
necessary hereunder.
(iv) This Agreement, the Custody Agreement and the Power of
Attorney have each been duly authorized, executed and delivered by or
on behalf of such Selling Stockholder and each constitutes a valid and
binding agreement of such Selling Stockholder, enforceable against such
Selling Stockholder in accordance with its terms, except as rights to
indemnity or contribution hereunder or thereunder may be limited by
federal or state securities laws and except as such enforceability may
be limited by bankruptcy, insolvency, reorganization or laws affecting
the rights of creditors generally and subject to general principles of
equity.
(vi) Such Selling Stockholder owns the Securities such Selling
Stockholder is selling as an individual or as a custodian for a minor,
and not as a trustee or in any other similar capacity.
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(vii) Such Selling Stockholder has not distributed and will not
distribute any prospectus or other offering material in connection with
the offering and sale of the Securities other than any Preliminary
Prospectus or the Prospectus or other materials permitted by the Act to
be distributed by such Selling Stockholder.
(viii) Such Selling Stockholder has not taken and will not
take, directly or indirectly any action designed to, or which might
reasonably be expected to, cause or result in stabilization or
manipulation of the price of the Company's Common Stock, to facilitate
the sale or resale of the Securities.
(c) Any certificate signed by any officer of the Company and
delivered to you or to counsel for the Underwriters pursuant to this Agreement
shall be deemed a representation and warranty by the Company to the Underwriters
as to the matters covered thereby; any certificate signed by or on behalf of any
Selling Stockholder as such and delivered to you or to counsel for the
Underwriters pursuant to this Agreement shall be deemed a representation and
warranty by such Selling Stockholder to the Underwriters as to the matters
covered thereby.
3. Purchase, Sale and Delivery of Securities.
(a) On the basis of the representations, warranties and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Company agrees to issue and sell 1,400,000 Firm Shares, and each
Selling Stockholder agrees, severally and not jointly, to sell the number of
Firm Shares set forth opposite the name of such Selling Stockholder in Schedule
I hereto, to the Underwriters, and the Underwriters agree to purchase from the
Company and the Selling Stockholders the Firm Shares. The purchase price for
each Firm Share shall be $[_______] per share.
The Firm Shares will be delivered by the Company and the
Custodian to you against payment of the purchase price therefor by same day
funds payable to the order of the Company and the Custodian, as appropriate, at
the offices of Xxxxx Xxxxxxx Inc., Xxxxx Xxxxxxx Tower, 000 Xxxxx 0xx Xxxxxx,
Xxxxxxxxxxx, XX, 00000 or such other location as may be mutually acceptable, at
9:00 a.m. on the third full business day following the date hereof (or, the
fourth full business day if this Agreement is executed after 4:30 p.m. Eastern
Standard Time on the date hereof), or at such other time as you and the Company
determine, such time and date of delivery being herein referred to as the "First
Closing Date." The Firm Shares, in definitive form and in such denominations and
registered in such names as you may request upon at least two business days'
prior notice to the Company and the Custodian, will be made available for
checking and packaging at the offices of Xxxxx Xxxxxxx Inc., Xxxxx Xxxxxxx
Tower, 000 Xxxxx 0xx Xxxxxx, Xxxxxxxxxxx, XX, 00000 or such other location as
may be mutually acceptable, on the business day prior to the First Closing Date.
(b) On the basis of the representations, warranties and
agreements herein
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contained, but subject to the terms and conditions herein set forth, the Company
agrees to grant to the Underwriters an option to purchase up to 223,500 Option
Shares at the same purchase price as the Firm Shares, for use solely in covering
any over-allotments made by the Underwriters in the sale and distribution of the
Firm Shares. The option granted hereunder may be exercised at any time (but not
more than once) within 30 days after the effective date of this Agreement upon
written notice by you to the Company and Attorneys-in-Fact setting forth the
aggregate number of Option Shares as to which the Underwriters are exercising
the option, the names and denominations in which the certificates for the Option
Shares are to be registered and the date and time, as determined by you, when
the Option Shares are to be delivered, such time and date being herein referred
to as the "Second Closing" and "Second Closing Date", respectively; provided,
however, that the Second Closing Date shall not be earlier than the First
Closing Date nor earlier than three nor later than 10 full business days after
the date on which the option shall have been exercised. No Option Shares shall
be sold and delivered unless the Firm Shares previously have been, or
simultaneously are, sold and delivered.
The Option Shares will be delivered by the Company and the
Custodian to you for the account of the Underwriters against payment of the
purchase price therefor by same day funds payable to the order of the Company or
the Custodian, as appropriate, at the offices of Xxxxx Xxxxxxx, Inc., Xxxxx
Xxxxxxx Tower, 000 Xxxxx 0xx Xxxxxx, Xxxxxxxxxxx, XX, 00000 or such other
location as may be mutually acceptable at 9:00 a.m. on the Second Closing Date.
The Option Shares in definitive form and in such denominations and registered in
such names as you have set forth in your notice of option exercise, will be made
available for checking and packaging at the office of Xxxxx Xxxxxxx, Inc., Xxxxx
Xxxxxxx Tower, 000 Xxxxx 0xx Xxxxxx, Xxxxxxxxxxx, XX, 00000 or such other
location as may be mutually acceptable, on the business day prior to the Second
Closing Date.
4. Covenants.
(a) The Company covenants and agrees with the Underwriters as
follows:
(i) If the Registration Statement has not already been declared
effective by the Commission, the Company will use its best efforts to
cause the Registration Statement and any post-effective amendments
thereto to become effective as promptly as possible; the Company will
notify you promptly of the time when the Registration Statement or any
post-effective amendment to the Registration Statement has become
effective or any supplement to the Prospectus has been filed and of any
request by the Commission for any amendment or supplement to the
Registration Statement or Prospectus or additional information; if the
Company has elected to rely on Rule 430A of the Rules and Regulations
or the filing of the Prospectus is otherwise required under Rule 424(b)
of the Rules and Regulations, the Company will file a Prospectus
containing the information omitted therefrom pursuant to such Rule 430A
or otherwise with the Commission within the time period required by,
and otherwise in accordance
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with the provisions of, Rule 424(b) and, if applicable, Rule 430A of
the Rules and Regulations; and the Company will not file any amendment
or supplement to the Registration Statement or Prospectus to which you
or your counsel shall reasonably object by notice to the Company after
having been furnished a copy a reasonable time prior to the filing.
(ii) The Company will advise you, promptly after it shall
receive notice or obtain knowledge thereof, of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or suspending the use of the Prospectus, of the
suspension of the qualification of the Securities for offering or sale
in any jurisdiction, or of the initiation or threatening of any
proceeding for any such purpose; and the Company will promptly use its
best efforts to prevent the issuance of any stop order or to obtain its
withdrawal at the earliest possible moment if such a stop order should
be issued.
(iii) Within the time during which a prospectus relating to the
Securities is required to be delivered under the Act, the Company will
comply with all requirements imposed upon it by the Act, as now and
hereafter amended, and by the Rules and Regulations, as from time to
time in force, so far as necessary to permit the continuance of sales
of or dealings in the Securities as contemplated by the provisions
hereof and the Prospectus. If during such period any event occurs as a
result of which the Prospectus or any other prospectus relating to the
Securities as then in effect would include an untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances then existing,
not misleading, or if during such period it is necessary to amend the
Registration Statement or supplement the Prospectus to comply with the
Act, the Company will promptly notify you and will promptly amend the
Registration Statement or supplement the Prospectus (at the expense of
the Company) so as to correct such statement or omission or effect such
compliance.
(iv) The Company will cooperate with you to qualify the
Securities for offering and sale under the securities laws of such
jurisdictions as you reasonably designate and to continue such
qualifications in effect so long as legally required for the
distribution of the Securities, except that the Company shall not be
required in connection therewith to qualify as a foreign corporation or
to execute a general consent to service of process in any state.
(v) The Company will furnish to the Underwriters copies of the
Registration Statement (two of which will be signed and will include
all exhibits), each Preliminary Prospectus, the Prospectus, and all
amendments and supplements to such documents, in each case as soon as
available and in such quantities as you may from time to time
reasonably request.
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(vi) During a period of five years commencing with the date
hereof, the Company will furnish to you as you may so request in
writing, copies of all periodic and special reports furnished to the
stockholders of the Company and filed with the Commission, the NASD,
NASDAQ or any securities exchange.
(vii) The Company will make generally available to its security
holders as soon as practicable, but in any event not later than 15
months after the end of the Company's current fiscal quarter, an
earnings statement (which need not be audited) covering a 12-month
period beginning after the effective date of the Registration Statement
that shall satisfy the provisions of Section 11(a) of the Act and Rule
158 of the Rules and Regulations.
(viii) The Company, whether or not the transactions
contemplated hereunder are consummated or this Agreement is prevented
from becoming effective under the provisions of Section 8(a) hereof or
is terminated, will pay or cause to be paid (A) all expenses (including
transfer taxes allocated to the respective transferees) incurred in
connection with the delivery to the Underwriters of the Securities, (B)
all expenses and fees (including, without limitation, fees and expenses
of the Company's accountants and counsel but, except as otherwise
provided below, not including fees of the Underwriters' counsel) in
connection with the preparation, printing, filing, delivery, and
shipping of the Registration Statement (including the financial
statements therein and all amendments, schedules, and exhibits
thereto), the Securities, each Preliminary Prospectus, the Prospectus,
and any amendment thereof or supplement thereto, and the printing,
delivery, and shipping of this Agreement and other underwriting
documents, including Blue Sky Memoranda, (C) all filing fees and
reasonable fees and disbursements of the Underwriters' counsel incurred
in connection with the qualification of the Securities for offering and
sale by the Underwriters or by dealers under the securities or blue sky
laws of the states and other jurisdictions which you shall designate in
accordance with Section 4(a) hereof, (D) the fees and expenses of any
transfer agent or registrar, (E) the filing fees incident to any
required review by the NASD of the terms of the sale of the Securities,
(F) listing fees, if any, and (G) all other costs and expenses incident
to the performance of its obligations hereunder that are not otherwise
specifically provided for herein. If the sale of the Securities
provided for herein is not consummated either by reason of action by
the Company pursuant to Section 8(a) hereof which prevents this
Agreement from becoming effective, or by reason of any failure, refusal
or inability on the part of the Company or the Selling Stockholders to
perform any agreement on its or their part to be performed, or because
any other condition of the Underwriters' obligations hereunder required
to be fulfilled by the Company or the Selling Stockholders is not
fulfilled, the Company will reimburse the Underwriters for all
out-of-pocket disbursements (including reasonable fees and
disbursements of counsel) reasonably incurred by the Underwriters in
connection with their investigation, preparing to market and marketing
the Securities or in contemplation of performing their obligations
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hereunder. The Company shall not in any event be liable to the
Underwriters for loss of anticipated profits from the transactions
covered by this Agreement.
(ix) The Company will apply the net proceeds from the sale of
the Securities to be sold by it hereunder for the purposes set forth in
the Prospectus under "Use of Proceeds".
(x) The Company will not, without the prior written consent of
Xxxxx Xxxxxxx Inc., offer for sale, sell, contract to sell, grant any
option for the sale of or otherwise issue or dispose of any Common
Stock or any securities convertible into or exchangeable for, or any
options or rights to purchase or acquire, Common Stock, except (i) to
the Underwriters pursuant to this Agreement, or (ii) to the holders of
options granted or to be granted under the Company's 1986 Employee
Stock Purchase Plan and Key Employee Incentive Plan (1992) (the
"Plans"), for a period of 120 days after the commencement of the public
offering of the Securities by the Underwriters. The Company will not,
without the prior consent of Xxxxx Xxxxxxx Inc., or subject to the
Lock-Up Agreements (as more fully described in Section (xi) below),
grant any new option under either Plan which becomes exercisable during
such 120 day period.
(xi) The Company either has caused to be delivered to you or
will cause to be delivered to you prior to the effective date of the
Registration Statement a Lock-Up Agreement, in form and substance
reasonably satisfactory to you, from each of the Selling Stockholders
and certain other persons named in the Prospectus, stating that such
person agrees that he or she will not, without your prior written
consent, offer for sale, sell, contract to sell or otherwise dispose of
any shares of Common Stock or rights to purchase Common Stock, except
(i) to the Underwriters pursuant to this Agreement, (ii) exercises of
options and (iii) a transfer by, gift of up to 20,000 shares of Common
Stock by Xxxxxx X Xxxxxxxx, Xx. for a period of 120 days after
commencement of the public offering of the Securities by the
Underwriters.
(xii) The Company has not taken and will not take, directly or
indirectly, any action designed to or which might reasonably be
expected to cause or result in, or which has constituted, the
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities, and has not
effected any sales of Common Stock which are required to be disclosed
in response to Item 701 of Regulation S-K under the Act which have not
been so disclosed in the Registration Statement.
(xiii) The Company will not incur any liability for any
finder's or broker's fee or agent's commission in connection with the
execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby.
(xiv) The Company will inform the Florida Department of Banking
and Finance at any time prior to the consummation of the distribution
of the Securities by
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the Underwriters if it commences engaging in business with the
government of Cuba or with any person or affiliate located in Cuba.
Such information will be provided as required after the commencement
thereof or after a change occurs with respect to previously reported
information.
(xv) The Company is familiar with the Investment Company Act of
1940, as amended, and the rules and regulations thereunder, and has in
the past conducted its affairs and, during a period of three years
commencing with the date hereof will conduct its affairs, in such a
manner so as to insure that the Company was not and will not be an
"Investment Company" within the meaning of the Investment Company Act
of 1940 and the rules and regulations thereunder.
(b) Each Selling Stockholder covenants and agrees with the
Underwriters as follows:
(i) Such Selling Stockholder will pay all taxes, if any, on the
transfer and sale, respectively, of the Securities being sold by such
Selling Stockholder and except as otherwise agreed to by the Company
and the Selling Stockholder, the fees of such Selling Stockholder's
counsel if such Selling Stockholder elects to be represented by counsel
other than Company counsel; provided, however, that each Selling
Stockholder severally agrees to reimburse the Company for any
reimbursement made by the Company to the Underwriters pursuant to
Section 4(a)(viii) hereof to the extent such reimbursement resulted
from the failure or refusal on the part of such Selling Stockholder to
comply under the terms or fulfill any of the conditions of this
Agreement, which failure or refusal arises out of or results from (A)
the breach by such Selling Stockholder of any representation or
warranty herein or in such Selling Stockholder's Power of Attorney, or
(B) any act taken or attempted to be taken by such Selling Stockholder
in its own right and in derogation of the authority granted by such
Selling Stockholder in such Power of Attorney.
(ii) The Securities to be sold by such Selling Stockholder,
represented by the certificates on deposit with the Custodian pursuant
to the Custody Agreement of such Selling Stockholder, are subject to
the interest of the Underwriters and the other Selling Stockholders;
the arrangements made for such custody are, except as specifically
provided in the Custody Agreement, irrevocable; and the obligations of
such Selling Stockholder hereunder shall not be terminated, except as
provided in this Agreement or in the Custody Agreement, by any act of
such Selling Stockholder, by operation of law, whether by the
liquidation, dissolution or merger of such Selling Stockholder, by the
death of such Selling Stockholder, or by the occurrence of any other
event. If any Selling Stockholder should liquidate, dissolve or be a
party to a merger or if any other such event should occur before the
delivery of the Securities hereunder, certificates for the Securities
deposited with the Custodian shall be delivered by the Custodian in
accordance with the terms and conditions of this Agreement as if
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such liquidation, dissolution, merger or other event had not occurred,
whether or not the Custodian shall have received notice thereof.
(iii) Such Selling Stockholder will not, without your prior
written consent, offer for sale, sell, contract to sell, grant any
option for the sale of or otherwise dispose of any Common Stock or any
securities convertible into or exchangeable for, or any options or
rights to purchase or acquire, Common Stock, except (i) to the
Underwriters pursuant to this Agreement, (ii) exercises of options and
(iii) a transfer by gift of up to 20,000 shares of Common Stock by
Xxxxxx X. Xxxxxxxx, Xx., for the period of 120 days after the
commencement of the public offering of the Securities by the
Underwriters as set forth in a Lock-Up Agreement, in form and
substance reasonably satisfactory to you which Agreement has been
delivered to you prior to the effective date of the Registration
Statement. Each Selling Stockholder agrees and consents to the entry
of stop transfer instructions with the Company's transfer agent
against the transfer of shares of Common Stock held by such Selling
Stockholder, except in accordance with the terms hereof.
(iv) Such Selling Stockholder has not taken and will not
take, directly or indirectly, any action designed to or which might
reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities.
(v) Such Selling Stockholder shall immediately notify you
if any event occurs, or of any change in information relating to such
Selling Stockholder or the Company or any new information relating to
the Company or relating to any matter stated in the Prospectus or any
supplement thereto, which results in the Prospectus (as supplemented)
including an untrue statement of a material fact or omitting to state
any material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading to the
extent such event or change relates to written information
specifically provided to the Company by such Selling Stockholders for
use in the Prospectus.
5. Conditions of Underwriters Obligations. The obligations of
the Underwriters hereunder are subject to the accuracy as of the date hereof
and at each of the First Closing Date and the Second Closing Date (as if made
at such Closing Date), of and compliance with all representations, warranties
and agreements of the Company and the Selling Stockholders contained herein, to
the performance by the Company and the Selling Stockholders of their respective
obligations hereunder and to the following additional conditions:
(a) No stop order suspending the effectiveness of the
Registration Statement or any amendment thereof shall have been issued; no
proceedings for the issuance of such an order shall have been initiated or to
the Company's knowledge, threatened; and any request of the Commission for
additional information (to be included in the Registration Statement or the
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Prospectus or otherwise) shall have been complied with to your reasonable
satisfaction.
(b) The Underwriters shall not have advised the Company
that the Registration Statement or the Prospectus, or any amendment thereof or
supplement thereto, contains an untrue statement of fact which, in your
reasonable opinion, is material, or omits to state a fact which, in your
reasonable opinion, is material and is required to be stated therein or
necessary to make the statements therein not misleading.
(c) Except as contemplated by the Registration Statement
and in the Prospectus, subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus, neither
the Company nor any of its subsidiaries other than in the ordinary course shall
have incurred any material liabilities or obligations, direct or contingent, or
entered into any material transactions, or declared or paid any dividends or
made any distribution of any kind with respect to its capital stock; and,
except as contemplated by the Registration Statement and Prospectus, subsequent
to the respective dates as of which information is given in the Registration
Statement and Prospectus there shall not other than in the ordinary course have
been any change in the capital stock (other than a change in the number of
outstanding shares of Common Stock due to the issuance of shares upon the
exercise of outstanding options or warrants), or any material change in the
short-term or long-term debt of the Company, or any issuance of options,
warrants, convertible securities or other rights to purchase the capital stock
of the Company or any of its subsidiaries, or any material adverse change or
any development likely to involve a prospective material adverse change
(whether or not arising in the ordinary course of business), in the general
affairs, condition (financial or otherwise), business, key personnel, property,
prospects, net worth or results of operations of the Company and its
subsidiaries, taken as a whole, that, in your reasonable judgment, makes it
impractical or inadvisable to offer or deliver the Securities on the terms and
in the manner contemplated in the Prospectus.
(d) On each Closing Date, there shall have been furnished
to you, the opinion of Ropes & Xxxx, counsel for the Company, or in the case of
Data Translation Networking Ltd. ("Limited"), United Kingdom counsel reasonably
acceptable to the Underwriters, dated such Closing Date or in the case of the
opinion of United Kingdom counsel, a reasonably contemporaneous date prior to
such Closing Date and addressed to you, to the effect that:
(i) Each of the Company and Limited has been duly
organized and is validly existing as a corporation in corporate good
standing under the laws of its jurisdiction of incorporation. Each of
the Company and Limited has full corporate power and authority to own
its properties and conduct its business as currently being carried on
and as described in the Registration Statement and Prospectus.
(ii) The capital stock of the Company conforms in all
material respects as to legal matters to the description thereof
contained in the Prospectus under the caption
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"Description of Capital Stock." All of the issued and outstanding
shares of the capital stock of the Company have been duly authorized
and validly issued and are fully paid and nonassessable. The
Securities to be issued and sold by the Company hereunder have been
duly authorized and, when issued, delivered and paid for in accordance
with the terms of this Agreement, will have been validly issued and
will be fully paid and nonassessable. Except as otherwise stated in
the Registration Statement and Prospectus, there are no preemptive
rights or other rights to subscribe for or to purchase, or any
restriction upon the voting or transfer of, any shares of Common Stock
pursuant to the Company's Articles of Organization, by-laws or any
agreement filed as an exhibit to the Registration Statement.
(iii) All of the issued and outstanding shares of capital
stock of Limited have been duly authorized and validly issued and are
fully paid and nonassessable, and, except as otherwise described in
the Registration Statement and Prospectus and except for directors'
qualifying shares, the Company owns of record all of the issued and
outstanding shares of such stock. To such counsel's knowledge, except
as described in the Registration Statement and Prospectus, there are
no options, warrants, agreements, contracts or other rights in
existence to purchase or acquire from the Company or Limited any
shares of the capital stock of the Company or Limited.
(iv) The Registration Statement has become effective under
the Act and, to such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceeding for that purpose has been instituted or threatened by the
Commission.
(v) The Company has full corporate power and authority to
enter into this Agreement and to issue, sell and deliver to the
Underwriters the Securities to be issued and sold by it hereunder.
This Agreement has been duly authorized, executed and delivered by 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 applicable law or regulation or any
agreement filed as an exhibit to the Registration Statement, the
Company's Articles of Organization or by-laws; and no consent,
approval, authorization or order of, or filing with, any court or
governmental agency or body is required for the execution, delivery
and performance of this Agreement or for the consummation of the
transactions contemplated hereby, including the issuance or sale of
the Securities by the Company, except such as have been obtained
(specifying the same) or except such as may be required under the Act
(provided, that no opinion need be expressed in this paragraph with
respect to compliance with the anti-fraud provisions of any federal or
state securities laws or any Blue Sky Laws or the by-laws or rules of
the NASD applicable to the corporate finance arrangements of the
transactions contemplated hereby).
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(vi) The Registration Statement and the Prospectus, and
any amendment thereof or supplement thereto, comply as to form in all
material respects with the requirements of the Act and the Rules and
Regulations; such counsel has participated in conferences with
officers and other representatives of the Company, and the Company's
independent public accountants, at which conferences the contents of
the Registration Statement and Prospectus and related matters were
discussed and, although such counsel is not passing upon, and does not
assume responsibility for, the accuracy, completeness or fairness of
the statements contained in the Registration Statement and Prospectus
and has not made any independent confirmation or verification thereof;
on the basis of the foregoing (and relying, as to materiality, to a
large extent upon the statements of officers and other representatives
of the Company), no information has come to the attention of such
counsel which causes such counsel to believe that the Registration
Statement or any amendment thereof, at the time the Registration
Statement became effective, contained any untrue statement of a
material fact or omitted to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading or that the Prospectus (as of the effective date and as of
such Closing Date), as amended or supplemented, includes any untrue
statement of material fact or omits to state a material fact necessary
to make the statements therein, in light of the circumstances under
which they were made, not misleading; it being understood that such
counsel need express no opinion as to the financial statements and
notes thereto, financial statement schedules and other financial and
statistical data included in any of the documents mentioned in this
clause.
(vii) To such counsel's knowledge, no holders of shares of
Common Stock or other securities of the Company have registration
rights with respect to securities of the Company, other than as
described in the Prospectus.
(viii) The Company is not an "Investment Company" as defined
in Section 3(a) of the Investment Company Act of 1940, as amended.
(ix) The statements under the captions "Description of
Capital Stock" in the Prospectus, insofar as such statements
constitute a summary of matters of law, are fair and accurate
summaries in all material respects.
In rendering such opinion such counsel may rely as to matters of fact,
to the extent such counsel deems reasonable upon certificates of officers of
the Company and its subsidiaries. Copies of any opinion or certificate relied
upon shall be delivered to you.
(e) On each Closing Date, there shall have been furnished
to you the opinion of Ropes & Xxxx, dated such Closing Date and addressed to
you, to the effect that:
(i) Immediately prior to the Closing Date, each of the
Selling Stockholders was the sole registered owner of the Securities
to be sold by such Selling Stockholder;
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upon registration of the Securities in the names of the Underwriters
in the stock records of the Company, the Underwriters will acquire all
the rights of such Selling Stockholder in the Securities (assuming the
Underwriters purchased the Securities in good faith and without notice
of an adverse claim), free and clear of any adverse claim, lien in
favor of the Company and restrictions on transfer imposed by the
Company.
(ii) The Attorney-in-Fact has the power and
authority to enter into the Custody Agreement, the Power of Attorney
and this Agreement and to perform and discharge such Selling
Stockholder's obligations thereunder and hereunder; and this
Agreement, the Custody Agreements and the Powers of Attorney have been
duly and validly authorized, executed and delivered by (or by any
Attorney-in-Fact, or any of them, on behalf of) the Selling
Stockholders.
In rendering such opinion such counsel may rely as to matters of fact,
to the extent such counsel deems reasonable upon certificates of the
Attorney-in-Fact or Selling Stockholders. Copies of any opinion or
certificate relied upon shall be delivered to you.
(f) On each Closing Date, there shall have been furnished
to you such opinion or opinions from Xxxxxxx, Procter & Xxxx, counsel for the
Underwriters, dated such Closing Date and addressed to you, with respect to the
formation of the Company, the validity of the Securities, the Registration
Statement, the Prospectus and other related matters as you reasonably may
request, and such counsel shall have received such papers and information as
they request to enable them to pass upon such matters.
(g) On each Closing Date you shall have received a
letter from Xxxxxx Xxxxxxxx LLP, dated such Closing Date and addressed to you,
confirming that they are independent public accountants within the meaning of
the Act and are in compliance with the applicable requirements relating to the
qualifications of accountants under Rule 2-01 of Regulation S-X of the
Commission, and stating, as of the date of such letter (or, with respect to
matters involving changes or developments since the respective dates as of
which specified financial information is given in the Prospectus, as of a date
not more than five days prior to the date of such letter), the conclusions and
findings of said firm with respect to the financial information and other
matters covered by its letter delivered to you concurrently with the execution
of this Agreement, and the effect of the letter so to be delivered on such
Closing Date shall be to confirm the conclusions and findings set forth in such
prior letter. All such letters shall be in a form reasonably satisfactory to
the Underwriters and counsel thereto.
(h) On each Closing Date, there shall have been furnished
to you a certificate, dated such Closing Date and addressed to you, executed on
behalf of the Company, by the President and by the chief financial officer of
the Company, to the effect that:
(i) The representations and warranties of the Company in
this Agreement are true and correct as if made at and as of such
Closing Date, and the Company has
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complied with all the agreements and satisfied all the conditions on
its part to be performed or satisfied at or prior to such Closing
Date;
(ii) No stop order or other order suspending the
effectiveness of the Registration Statement or any amendment thereof
or the qualification of the Securities for offering or sale has been
issued, and no proceeding for that purpose has been instituted or, to
the best of their knowledge, is contemplated by the Commission or any
state or regulatory body; and
(iii) The signers of said certificate on behalf of the
Company have carefully examined the Registration Statement and the
Prospectus, and any amendments thereof or supplements thereto, and (A)
the Registration Statement, or any amendment thereof, does not contain
any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading, and the Prospectus, as amended or
supplemented, does not include any untrue statement of material fact
or omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, (B) since the effective date of the Registration Statement
and except as contemplated in the Registration Statement and the
Prospectus, neither the Company nor any of its subsidiaries other than
in the ordinary course has incurred any material liabilities or
obligations, direct or contingent, or entered into any material
transactions, not in the ordinary course of business, or declared or
paid any dividends or made any distribution of any kind with respect
to its capital stock; and except as contemplated by the Prospectus,
there has not, other than in the ordinary course, been any change in
the capital stock (other than a change in the number of outstanding
shares of Common Stock due to the issuance of shares upon the exercise
of outstanding options or warrants), or any material change in the
short-term or long-term debt, or any issuance of options, warrants,
convertible securities or other rights to purchase the capital stock,
of the Company, or any of its subsidiaries, or any material adverse
change or any development involving a prospective material adverse
change (whether or not arising in the ordinary course of business), in
the general affairs, condition (financial or otherwise), business, key
personnel, property, prospects, net worth or results of operations of
the Company and its subsidiaries, taken as a whole, and (C) except as
stated in the Registration Statement and the Prospectus, there is not
pending, or, to the knowledge of the Company, threatened or
contemplated, any action, suit or proceeding to which the Company or
any of its subsidiaries is a party before or by any court or
governmental agency, authority or body, or any arbitrator, which might
result in any material adverse change in the condition (financial or
otherwise), business, prospects or results of operations of the
Company and its subsidiaries, taken as a whole.
(i) On each Closing Date, there shall have been furnished
to you a certificate or certificates, dated such Closing Date and addressed to
you, signed by each of the Selling Stockholders or any of such Selling
Stockholder's Attorney-in-Fact to the effect that
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the representations and warranties of such Selling Stockholder contained in
this Agreement are true and correct as if made at and as of such Closing Date,
and that such Selling Stockholder has complied with all the agreements and
satisfied all the conditions on such Selling Stockholder's part to be performed
or satisfied at or prior to such Closing Date.
(j) The Firm Shares and Option Shares, if any, shall be
approved for designation, subject to notice of issuance, on the NASDAQ National
Market System.
All such opinions, certificates, letters and other documents
will be in compliance with the provisions hereof only if they are reasonably
satisfactory in form and substance to you and counsel for the Underwriters.
The Company will furnish you with such conformed copies of such opinions,
certificates, letters and other documents as you shall reasonably request.
6. Indemnification and Contribution.
(a) The Company and each Selling Stockholder, severally
and not jointly, agree to indemnify and hold harmless the Underwriters against
any losses, claims, damages or liabilities, joint or several, to which the
Underwriters may become subject, under the Act or otherwise (including in
settlement of any litigation if such settlement is effected with the written
consent of the Company and/or such Selling Stockholders, as the case may be),
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 a material fact contained in the Registration Statement, including
the information deemed to be a part of the Registration Statement at the time
of effectiveness pursuant to Rule 430A, if applicable, any Preliminary
Prospectus, the Prospectus, or any amendment or supplement thereto, (but only
if used during the period specified in Section 4(a)(iii) above), 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 in light of the circumstances under which they were made, not
misleading, and will reimburse the Underwriters for any legal or other expenses
reasonably incurred by them in connection with investigating or defending
against such loss, claim, damage, liability or action; provided, however, that
neither the Company nor any Selling Stockholder shall be liable in any such
case to the extent that any such loss, claim, damage, liability or action (i)
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in the Registration Statement, any
Preliminary Prospectus, the Prospectus, or any such amendment or supplement, in
reliance upon and in conformity with written information furnished to the
Company by you, or by any Underwriter directly or through you, specifically for
use in the preparation thereof, or (ii) is asserted by a person to whom a copy
of the Prospectus (as then amended or supplemented, if the Company shall have
furnished to the Underwriters copies, in such number as may have been
reasonably requested by them, of any amendment or supplement thereto) shall not
have been delivered by or on behalf of the Underwriters, if required by law so
to have been delivered, at or prior to the written confirmation of the sale of
Securities to such person, if the Prospectus
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(as so amended or supplemented) would have cured the misstatement or omission
which gave rise to such loss, claim, damage, liability or action.
Notwithstanding anything in this Agreement, (i) each Selling
Stockholder shall only be liable to the extent such untrue statement omission
was made in reliance on and in conformity with written information furnished by
the Selling Stockholder in such capacity to the Company or the Underwriters
specifically for use in the preparation of the Registration Statement and
Prospectus; and (ii) the aggregate liability of any Selling Stockholder for
indemnification and contribution pursuant to this Agreement shall not exceed an
amount equal to the proceeds of the sale of the Securities by the Selling
Stockholder after deducting all underwriting discounts and commissions and
other costs and expenses paid or to be paid by such Selling Stockholder in
connection with or relating to the transactions contemplated by this Agreement.
(b) The Underwriters, severally and not jointly, will
indemnify and hold harmless the Company and each Selling Stockholder against
any losses, claims, damages or liabilities to which the Company and the Selling
Stockholders may become subject, under the Act or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of the Underwriters), insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement, any Preliminary Prospectus, 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, in light of the circumstances under
which they were made 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 the Registration Statement, any Preliminary
Prospectus, the Prospectus, or any such amendment or supplement, in reliance
upon and in conformity with written information furnished to the Company by
you, specifically for use in the preparation thereof, and will reimburse the
Company and the Selling Stockholders for any legal or other expenses reasonably
incurred by the Company or any such Selling Stockholder in connection with
investigating or defending against any such loss, claim, damage, liability or
action.
(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 the indemnifying party from any liability
that it may have to any indemnified party. 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 in, whether or not such notice is given, 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, and after written notice from the indemnifying party to such indemnified
party of the indemnifying
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party's election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal or
other expenses subsequently incurred by such indemnified party in connection
with the defense thereof. An indemnifying party shall not be obligated under
any settlement agreement relating to any action under this Section 6 to which
it has not agreed in writing.
(d) If the indemnification provided for in this Section 6
is unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) 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) or (b) above, (i)
in such proportion as is appropriate to reflect the relative benefits received
by the Company and the Selling Stockholders on the one hand and the
Underwriters on the other from the offering of the 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
the Selling Stockholders on the one hand and the Underwriters on the other in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Selling
Stockholders on the one hand and the Underwriters on the other shall be deemed
to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Company and Selling Stockholders
bear to the total underwriting discounts and commissions received by the
Underwriters, 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, the Selling Stockholders or the
Underwriters and the parties' relevant intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission. The
Company, the Selling Stockholders and the Underwriters agree that it would not
be just and equitable if contributions pursuant to this subsection (d) were to
be determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in the first
sentence of this subsection (d). 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 (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending against any action or claim which is the subject of
this subsection (d). Notwithstanding the provisions of this subsection (d),
the Underwriters shall not be required to contribute any amount in excess of
the amount by which the total price at which the Securities underwritten by it
and distributed to the public were offered to the public exceeds the amount of
any damages that the Underwriters have otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged omission.
The aggregate liability of any Selling Stockholder for indemnification and
contribution pursuant to this Agreement shall not exceed an amount equal to the
proceeds of the sale of the Securities by the Selling Stockholder after
deducting all
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underwriting discounts and commissions and other costs and expenses paid or to
be paid by such Selling Stockholder in connection with or relating to the
transactions contemplated by this Agreement. 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.
(e) The obligations of the Company and the Selling
Stockholders under this Section 6 shall be in addition to any liability other
than to the Underwriters 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 the Underwriters within the meaning of Section 15
of the Act; and the obligations of the Underwriters under this Section 6 shall
be in addition to any liability, other than to the Company and Selling
Stockholders, that the Underwriters may otherwise have and shall extend, upon
the same terms and conditions, to each director of the Company (including any
person who, with his consent, is named in the Registration Statement as about
to become a 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 or any Selling Stockholder within the meaning of Section 15 of the Act.
7. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties, and agreements of the Company and
the Selling Stockholders herein or in certificates delivered pursuant hereto,
and the agreements of the Underwriters, the Company and the Selling
Stockholders contained in Section 6 hereof, shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of any
Underwriter or any controlling person thereof, or the Company or any of its
officers, directors, or controlling persons, or any Selling Stockholders or any
controlling person thereof, and shall survive delivery of, and payment for, the
Securities to and by the Underwriters hereunder.
8. Effective Date of this Agreement and Termination.
(a) This Agreement shall become effective at 10:00 a.m.,
Boston time, on the first full business day following the effective date of the
Registration Statement, or at such earlier time after the effective time of the
Registration Statement as you in your discretion shall first release the
Securities for sale to the public. For the purpose of this Section, the
Securities shall be deemed to have been released for sale to the public upon
release by you of the publication of a newspaper advertisement relating thereto
or upon release by you of telexes offering the Securities for sale to
securities dealers, whichever shall first occur. By giving notice as
hereinafter specified before the time this Agreement becomes effective, you, or
the Company may prevent this Agreement from becoming effective without
liability of any party to any other party, except that the provisions of
Section 4(a)(viii), Section 4(b)(i) and Section 6 hereof shall at all times be
effective.
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(b) You shall have the right to terminate this Agreement
by giving notice as hereinafter specified at any time at or prior to the First
Closing Date, and the option referred to in Section 3(b), if exercised, may be
cancelled at any time prior to the Second Closing Date, if (i) the Company or
the Selling Stockholders shall have failed, refused or been unable, at or prior
to such Closing Date, to perform any agreement on its part to be performed
hereunder, (ii) any other condition of the Underwriters obligations hereunder
is not fulfilled, (iii) since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there shall have
occurred any material adverse change or any development involving prospective
material adverse change in or affecting the condition, financial or otherwise,
of the Company and its subsidiaries taken as a whole or the earnings, business
affairs, management, or business prospects of the Company and its subsidiaries,
taken as a whole, whether or not arising in the ordinary course of business,
(iv) any federal or state statute, regulation, rule or order of any court or
other governmental authority shall have been enacted, published, decreed or
otherwise promulgated which in your reasonable opinion materially and adversely
affects or will materially and adversely affect the business or operations of
the Company or any of its subsidiaries, (v) trading on the New York Stock
Exchange or the American Stock Exchange shall have been wholly suspended, (vi)
minimum or maximum prices for trading shall have been fixed, or maximum ranges
for prices for securities shall have been required, on the New York Stock
Exchange or the American Stock Exchange, by such Exchange or by order of the
Commission or any other governmental authority having jurisdiction, (vii) a
banking moratorium shall have been declared by Federal, New York or Minnesota
authorities, or (viii) there has occurred any material adverse change in the
financial markets in the United States or an outbreak of major hostilities (or
an escalation thereof) in which the United States is involved, a declaration of
war by Congress, any other substantial national or international calamity or
any other event or occurrence of a similar character shall have occurred since
the execution of this Agreement that, in your reasonable judgment, makes it
impractical or inadvisable to proceed with the completion of the sale of and
payment for the Securities. Any such termination shall be without liability of
any party to any other party except that the provisions of Section 4(a)(viii),
Section 4(b)(i) and Section 6 hereof shall at all times be effective.
(c) If you elect to prevent this Agreement from becoming
effective or to terminate this Agreement as provided in this Section, the
Company and an Attorney-in-Fact, on behalf of the Selling Stockholders, shall
be notified promptly by you by telephone or telegram, confirmed by letter. If
the Company elects to prevent this Agreement from becoming effective, you and
an Attorney-in-Fact, on behalf of the Selling Stockholders, shall be notified
by the Company by telephone or telegram, confirmed by letter.
9. Default by One or More of the Selling Stockholders or the
Company. If one or more of the Selling Stockholders shall fail at the First
Closing Date to sell and deliver the number of Securities which such Selling
Stockholder or Selling Stockholders are obligated to sell hereunder, and the
Company and the remaining Selling Stockholders do not exercise the right, which
is hereby granted to increase, pro rata or otherwise, the number of Securities
to be sold by them hereunder to the total number of Securities to
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be sold by the Company and all Selling Stockholders as set forth in Schedule I,
then the Underwriters may at your option, by written notice from you to the
Company and the non-defaulting Selling Stockholders, either (a) terminate this
Agreement without any liability on the part of any non-defaulting party or (b)
elect to purchase the Securities which the Company and the non-defaulting
Selling Stockholders have agreed to sell hereunder.
In the event of a default by any Selling Stockholder as
referred to in this Section, either you or the Company or, by joint action
only, the non-defaulting Selling Stockholders shall have the right to postpone
the First Closing Date for a period not exceeding seven days in order to effect
any required changes in the Registration Statement or Prospectus or in any
other documents or arrangements.
If the Company shall fail at the First Closing Date to sell
and deliver the number of Securities which it is obligated to sell hereunder,
then this Agreement shall terminate without any liability on the part of any
non-defaulting party.
No action taken pursuant to this Section shall relieve the
Company or any Selling Stockholders so defaulting from liability, if any, in
respect of such default.
10. Information Furnished by Underwriters. The statements set
forth in the last paragraph of the cover page (to the extent related to the
Underwriters), in the stabilization legend on page 2 of the Preliminary
Prospectus and the Prospectus; and under the caption "Underwriting" in any
Preliminary Prospectus and in the Prospectus; and any other written information
which specifies that it is for use in the Registration Statement or Prospectus
constitute the written information furnished by or on behalf of the
Underwriters referred to in Section 2 and Section 6 hereof.
11. In all dealings hereunder, the parties hereto shall be
entitled to act and rely upon any statement, request, notice or agreement made
or given by you; and in all dealings with any Selling Stockholder hereunder,
you and the Company shall be entitled to act and rely upon any statement,
request, notice or agreement on behalf of such Selling Stockholder made or
given by an Attorney-in-Fact for such Selling Stockholder.
12. Notices. Except as otherwise provided herein, all
communications hereunder shall be in writing or by telegraph and, if to the
Underwriters, shall be mailed, faxed, telegraphed or delivered to the
Underwriters c/o Xxxxx Xxxxxxx Inc., Xxxxx Xxxxxxx Tower, 000 Xxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, facsimile no. (000) 000-0000; if to the
Company, shall be mailed, faxed, telegraphed or delivered to it at 000 Xxxxx
Xxxxx, Xxxxxxxx, XX 00000-0000, facsimile no. (000) 000-0000 Attention: Xxxxxx
X. Xxxxxxxx, Xx., President; if to any of the Selling Stockholders, at the
address of the Attorneys-in-Fact as set forth in the Powers of Attorney, or in
each case to such other address as the person to be notified may have requested
in writing. All notices given by telegram shall be promptly
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confirmed by letter. Any party to this Agreement may change such address for
notices by sending to the parties to this Agreement written notice of a new
address for such purpose.
13. Persons Entitled to Benefit of Agreement. This Agreement
shall inure to the benefit of and be binding upon the parties hereto and their
respective successors and assigns and the controlling persons, officers and
directors referred to in Section 6. Nothing in this Agreement is intended or
shall be construed to give to any other person, firm or corporation any legal
or equitable remedy or claim under or in respect of this Agreement or any
provision herein contained. The term "successors and assigns" as herein used
shall not include any purchaser, as such purchaser, of any of the Securities
from the Underwriters.
14. Governing Law. This Agreement shall be governed by and
construed in accordance with the substantive laws of the State of New York
(without regard to its choice of law rules).
[REMAINDER OF THIS PAGE INTENTIONALLY BLANK]
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Please sign and return to the Company the enclosed duplicates of this
letter whereupon this letter will become a binding agreement between the
Company, the Selling Stockholders and the Underwriters in accordance with its
terms.
Very truly yours,
DATA TRANSLATION, INC.
By:
----------------------------------
President
SELLING STOCKHOLDERS
By:
----------------------------------
Attorney-in-Fact
Confirmed as of the date
first above written.
XXXXX XXXXXXX INC.
By:
----------------------------------
Vice President
XXXXXXXXX & XXXXX LLC
By:
----------------------------------
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SCHEDULE I
Selling Stockholders
Number of
Firm Shares
Name to be Sold
---- -----------
Xxxxxx X. Xxxxxxxx, Xx. 50,000
Xxxx X. Xxxxxxxx 40,000
------
Total 90,000
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