1,347,368 Shares
DIGITAL MICROWAVE CORPORATION
Common Stock
UNDERWRITING AGREEMENT
----------------------
March 7, 2000
Xxxx Xxxxxxxx Xxxxxxx,
a division of Xxxx Xxxxxxxx Incorporated
00 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Ladies and Gentlemen:
Digital Microwave Corporation, a Delaware corporation (the
"Company"), proposes, subject to the terms and conditions contained herein, to
sell to you (the "Underwriter"), an aggregate of 1,347,368 shares (the "Shares")
of the Company's Common Stock, $0.01 par value (the "Common Stock").
1. SALE AND PURCHASE OF THE SHARES. On the basis of the
representations, warranties and agreements contained in, and subject to the
terms and conditions of, this Agreement, the Company agrees to sell to the
Underwriter, and the Underwriter agrees to purchase from the Company, at a price
of $ 33.25 per share (the "Initial Price"), the Shares.
2. DELIVERY AND PAYMENT. Delivery by the Company of the
Shares to the Underwriter for its account, and payment of the purchase price by
wire transfer or by certified or official bank check or checks payable in New
York Clearing House (same day) funds drawn to the order of the Company for the
shares purchased from the Company, against delivery of the respective
certificates therefor to the Underwriter, shall take place at the offices of
Xxxx Xxxxxxxx Xxxxxxx, a division of Xxxx Xxxxxxxx Incorporated, 00 Xxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, at 10:00 a.m., New York City time, on the
third business day following the date of this Agreement, or at such time on such
other date, not later than 10 business days after the date of this Agreement, as
shall be agreed upon by the Company and the Underwriter (such time and date of
delivery and payment are called the "Closing Date").
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Certificates evidencing the Shares shall be registered in such names
and shall be in such denominations as the Underwriter shall request at least two
full business days before the Closing Date and shall be made available to the
Underwriter for checking and packaging, at such place as is designated by the
Underwriter, on the full business day before the Closing Date.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company hereby represents and warrants to the Underwriter as follows:
(a) A Registration Statement on Form S-3 (File No.
333-73021), with respect to the Shares, including a Prospectus (as
defined below), have been prepared by the Company in conformity with
the requirements of the Securities Act of 1933, as amended (the
"Securities Act"), and the rules and regulations (the "Rules") of the
Securities and Exchange Commission (the "Commission") thereunder, and
have been filed with the Commission and declared effective. Such
Registration Statement and Prospectus may have been amended or
supplemented prior to the date of this Underwriting Agreement; any such
amendment of such Registration Statement or supplement was so prepared
and filed, and any such amendment filed after the effective date of
such Registration Statement (the "Effective Date") has been declared
effective. 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. A
prospectus supplement (the "Prospectus Supplement") setting forth the
terms of the offering, sale and plan of distribution of the Shares (the
"Offering") and additional information concerning the Company and its
business has been or will be so prepared and will be filed pursuant to
Rule 424(b) of the Rules on or before the second business day after the
date hereof (or such earlier time as may be required by the Rules).
Copies of such Registration Statement and Prospectus, any such
amendments or supplements and all documents incorporated by reference
therein that were filed with the Commission on or prior to the date of
this Underwriting Agreement (including one fully executed copy of the
Registration Statement and of each amendment thereto for the
Underwriter and its counsel) have been delivered to the Underwriter and
its counsel. The Registration Statement, as it may have heretofore been
amended, is referred to herein as the "Registration Statement," and the
final form of Prospectus included in the Registration Statement, as
supplemented by the Prospectus Supplement, is referred to herein as the
"Prospectus." Any reference herein to the Registration Statement, the
Prospectus or any amendment or supplement thereto shall be deemed to
refer to and include the documents incorporated by reference therein,
and any reference herein to the terms "amend," "amendment" or
"supplement" with respect to the Registration Statement or Prospectus
shall be deemed to refer to and include the filing after the execution
hereof of any document with the Commission deemed to be incorporated by
reference therein. For purposes of this Underwriting Agreement, all
references to the Registration Statement and Prospectus or to any
amendment or supplement thereto shall be deemed to include any copy
filed with the Commission pursuant to its Electronic Data Gathering
Analysis and Retrieval System (XXXXX), and such copy shall be identical
in content to any Prospectus delivered to the Underwriter for use in
connection with the offering of the Shares.
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(b) Each part of the Registration Statement, when such
part became or becomes effective and the Prospectus and any amendment
or supplement thereto, on the date of filing thereof with the
Commission and at the Closing Date, conformed or will conform in all
material respects with the requirements of the Securities Act and the
Rules; each part of the Registration Statement, when such part became
or becomes effective, or when such part was filed with the Commission,
did not or will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; the Prospectus
and any amendment or supplement thereto, on the date thereof and at the
Closing Date, did not or will not include an untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
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 concerning the Underwriter
that was furnished to the Company by the Underwriter specifically for
use in the preparation thereof.
(c) The documents incorporated by reference in the
Registration Statement, the Prospectus, any amendment or supplement
thereto, when they became or become effective under the Securities Act
or were or are filed with the Commission under the Securities Act or
the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
as the case may be, conformed or will conform in all material respects
with the requirements of the Securities Act, the Rules, the Exchange
Act and/or the rules and regulations of the Commission thereunder (the
"Exchange Rules"), as applicable.
(d) The financial statements of the Company together with
the related schedules and notes thereto, set forth or included or
incorporated by reference in the Registration Statement and Prospectus
fairly present the financial condition of the Company as of the dates
indicated and the results of operations, changes in financial position,
shareholders' equity and cash flows for the periods therein specified,
in conformity with generally accepted accounting principles
consistently applied throughout the periods involved (except as
otherwise stated therein). The summary and/or selected financial and
statistical data included or incorporated by reference in the
Registration Statement and the Prospectus present fairly the
information shown therein and, to the extent based upon or derived from
the financial statements, have been compiled on a basis consistent with
the financial statements presented therein. In addition, any pro forma
financial statements of the Company, and the related notes thereto,
included or incorporated by reference in the Registration Statement and
the Prospectus present fairly the information shown therein, have been
prepared in accordance with the Commission's rules and guidelines with
respect to pro forma financial statements and have been properly
compiled on the basis described therein, and the assumptions used in
the preparation thereof are reasonable and the adjustments used therein
are appropriate to give effect to the transactions and circumstances
referred to therein. Furthermore, all financial statements required by
Rule 3-05 or Rule 3-14 of Regulation S-X ("Rule 3-05" and
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"Rule 3-14", respectively), if any, have been included or incorporated
by reference in the Registration Statement and the Prospectus and any
such financial statements are in conformity with the requirements of
Rule 3-05 and Rule 3-14. No other financial statements are required to
be set forth or incorporated by reference in the Registration Statement
or the Prospectus under the Securities Act or the Rules.
(e) Xxxxxx Xxxxxxxx LLP, whose reports are incorporated
by reference in the Registration Statement, are and, during the periods
covered by their reports, were independent public accountants as
required by the Securities Act and the Rules.
(f) The Company and each of its Subsidiaries (as
hereinafter defined) is a corporation duly organized, validly existing
and in good standing under the laws of its jurisdiction of its
incorporation. The Company and each such subsidiary or other entity
controlled directly or indirectly by the Company (collectively,
"Subsidiaries") is duly qualified to do business and is in good
standing as a foreign corporation in each jurisdiction in which the
nature of the business conducted by it or location of the assets or
properties owned, leased or licensed by it requires such qualification,
except for such jurisdictions where the failure to so qualify would not
have a material adverse effect on the assets or properties, business,
results of operations or financial condition of the Company (a
"Material Adverse Effect"). The Company and each of its Subsidiaries
has all requisite corporate power and authority, and all necessary
authorizations, approvals, consents, orders, licenses, certificates and
permits of and from all governmental or regulatory bodies or any other
person or entity (collectively, the "Permits"), to own, lease and
license its assets and properties and conduct its business, all of
which are valid and in full force and effect, as described in or
incorporated by reference in the Registration Statement and the
Prospectus, except where the lack of such Permits, individually or in
the aggregate, would not have a Material Adverse Effect. The Company
and each of its Subsidiaries has fulfilled and performed in all
material respects all of its material obligations with respect to such
Permits and to the Company's knowledge, no event has occurred that
allows, or after notice or lapse of time would allow, revocation or
termination thereof or results in any other material impairment of the
rights of the Company thereunder. Except as may be required under the
Securities Act and state and foreign Blue Sky laws, no other Permits
are required to enter into, deliver and perform this Agreement and to
issue and sell the Shares.
(g) The Company and each of its Subsidiaries owns or
possesses adequate and enforceable rights to use all trademarks,
trademark applications, trade names, service marks, copyrights,
copyright applications, licenses, know-how and other similar rights and
proprietary knowledge (collectively, "Intangibles") described in or
incorporated by reference in the Registration Statement and the
Prospectus as being owned by it which are materially necessary for the
conduct of its business. Neither the Company nor any of its
Subsidiaries has received any notice of, or is aware of, any material
infringement of or material conflict with asserted rights of others
with respect to any Intangibles.
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(h) The Company and each of its Subsidiaries has good and
marketable title in fee simple to all material items of real property
and good and marketable title to all material personal property
described in the Registration Statement or the Prospectus or any
document incorporated by reference therein as being owned by it. Any
real property and buildings described in the Registration Statement or
the Prospectus or any document incorporated by reference therein as
being held under lease by the Company and each of its Subsidiaries is
held by it under valid, existing and enforceable leases, free and clear
of all liens, encumbrances, claims, security interests and defects,
except such as are described in the Registration Statement and the
Prospectus or would not have a Material Adverse Effect.
(i) There are no litigation or governmental proceedings
to which the Company or its Subsidiaries is subject or which is pending
or, to the knowledge of the Company, threatened, against the Company or
any of its Subsidiaries, which, individually or in the aggregate, might
have a Material Adverse Effect, affect the consummation of this
Agreement or which is required to be disclosed in the Registration
Statement and the Prospectus or any document incorporated by reference
therein that is not so disclosed.
(j) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus,
except as described therein, (a) there has not been any material
adverse change with regard to the assets or properties, business,
results of operations or financial condition of the Company; (b)
neither the Company nor its Subsidiaries has sustained any loss or
interference with its assets, businesses or properties (whether owned
or leased) from fire, explosion, earthquake, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or any
court or legislative or other governmental action, order or decree
which would have a Material Adverse Effect; and (c) since the date of
the latest balance sheet included in the Registration Statement and the
Prospectus, except as reflected therein, neither the Company nor its
Subsidiaries has (i) issued any securities or incurred any liability or
obligation, direct or contingent, for borrowed money, except such
liabilities or obligations incurred in the ordinary course of business,
(ii) entered into any transaction not in the ordinary course of
business or (iii) declared or paid any dividend or made any
distribution on any shares of its stock or redeemed, purchased or
otherwise acquired or agreed to redeem, purchase or otherwise acquire
any shares of its stock.
(k) There is no document, contract or other agreement of
a character required to be described in the Registration Statement or
Prospectus or to be filed as an exhibit to the Registration Statement
which is not described or filed as required by the Securities Act or
Rules. Each description of a contract, document or other agreement in
the Registration Statement and the Prospectus or incorporated by
reference therein accurately reflects in all material respects the
terms of the underlying document, contract or agreement. Each agreement
described in the Registration Statement and Prospectus or incorporated
by reference therein or listed in the Exhibits to the Registration
Statement or incorporated by reference is in full force and effect and
is valid and enforceable by and
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against the Company or the Subsidiary, as the case may be, in
accordance with its terms. Neither the Company nor the Subsidiary, if
the Subsidiary is a party, nor to the Company's knowledge, any other
party is in default in the observance or performance of any term or
obligation to be performed by it under any such agreement, and no event
has occurred which with notice or lapse of time or both would
constitute such a default, in any such case which default or event,
individually or in the aggregate, would have a Material Adverse Effect.
No default exists, and no event has occurred which with notice or lapse
of time or both would constitute a default, in the due performance and
observance of any term, covenant or condition, by the Company or the
Subsidiary, if the Subsidiary is a party thereto, of any other material
agreement or instrument to which the Company or the Subsidiary is a
party or by which it or its properties or business may be bound or
affected which default or event, individually or in the aggregate,
would have a Material Adverse Effect.
(l) Neither the Company nor any of its Subsidiaries is in
violation of any term or provision of its charter or by-laws or of any
franchise, license, permit, judgment, decree, order, statute, rule or
regulation, where the consequences of such violation, individually or
in the aggregate, would have a Material Adverse Effect.
(m) Neither the execution, delivery and performance of
this Agreement by the Company nor the consummation of any of the
transactions contemplated hereby (including, without limitation, the
issuance and sale by the Company of the Shares) will give rise to a
right to terminate or accelerate the due date of any payment due under,
or conflict with or result in the material breach of any term or
provision of, or constitute a material default (or an event which with
notice or lapse of time or both would constitute a material default)
under, or require any consent or waiver under, or result in the
execution or imposition of any lien, charge or encumbrance upon any
properties or assets of the Company or its Subsidiaries pursuant to the
terms of, any indenture, mortgage, deed of trust or other agreement or
instrument to which the Company or its Subsidiaries is a party or by
which either the Company or its Subsidiaries or any of their properties
or businesses is bound, or any material franchise, license, permit,
judgment, decree, order, statute, rule or regulation applicable to the
Company or its Subsidiaries or violate any provision of the charter or
by-laws of the Company or its Subsidiaries, except for such consents or
waivers which have already been obtained and are in full force and
effect.
(n) The certificates evidencing the Shares are in due and
proper legal form and have been duly authorized for issuance by the
Company. All of the issued and outstanding shares of Common Stock have
been duly and validly issued and are fully paid and nonassessable.
There are no statutory preemptive or other similar rights to subscribe
for or to purchase or acquire any shares of Common Stock of the Company
or its Subsidiaries or any such rights pursuant to its Certificate of
Incorporation or by-laws or any agreement or instrument to or by which
the Company or any of its Subsidiaries is a party or bound. The Shares,
when issued and sold pursuant to this Agreement, will be duly and
validly issued, fully paid and nonassessable and none of them will be
issued in
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violation of any preemptive or other similar right. Except as disclosed
in the Registration Statement and the Prospectus, there is no
outstanding option, warrant or other right calling for the issuance of,
and there is no commitment, plan or arrangement to issue, any share of
stock of the Company or its Subsidiaries or any security convertible
into, or exercisable or exchangeable for, such stock. The Common Stock
and the Shares conform in all material respects to all statements in
relation thereto contained in the Registration Statement and the
Prospectus. All outstanding shares of capital stock of each Subsidiary
have been duly authorized and validly issued, and are fully paid and
nonassessable and are owned directly by the Company or by another
wholly-owned subsidiary of the Company free and clear of any security
interests, liens, encumbrances, equities or claims, other than those
described in the Prospectus.
(o) No holder of any security of the Company has the
right to have any security owned by such holder included in the
Registration Statement or to demand registration of any security owned
by such holder during the period ending 90 days after the date of this
Agreement.
(p) All necessary corporate action has been duly and
validly taken by the Company to authorize the execution, delivery and
performance of this Agreement and the issuance and sale of the Shares
by the Company. This Agreement has been duly and validly authorized,
executed and delivered by the Company and constitutes and will
constitute legal, valid and binding obligations of the Company
enforceable against the Company in accordance with its terms, except as
the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and by general equitable
principles.
(q) Neither the Company nor any of its Subsidiaries are
involved in any labor dispute nor, to the knowledge of the Company, is
any such dispute threatened, which dispute would have a Material
Adverse Effect. The Company is not aware of any existing or imminent
labor disturbance by the employees of any of its principal suppliers or
contractors which would have a Material Adverse Effect. The Company is
not aware of any threatened or pending litigation between the Company
or its Subsidiaries and any of its executive officers which, if
adversely determined, could have a Material Adverse Effect and does not
reasonably believe that such officers will not remain in the employment
of the Company.
(r) No transaction has occurred between or among the
Company and any of its officers or directors or any affiliate or
affiliates of any such officer or director that is required to be
described in and is not described in or incorporated by reference in
the Registration Statement and the Prospectus.
(s) The Company has not taken, nor will it take, directly
or indirectly, any action designed to or which might reasonably be
expected to cause or result in, or which has constituted or which might
reasonably be expected to constitute, the stabilization or
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manipulation of the price of the Common Stock to facilitate the sale or
resale of any of the Shares.
(t) The Company and its Subsidiaries have filed all
Federal, state, local and foreign tax returns which are required to be
filed through the date hereof, or has received extensions thereof, and
has paid all taxes shown on such returns and all assessments received
by it to the extent that the same are material and have become due.
There are no tax audits or investigations pending, which if adversely
determined would have a Material Adverse Effect; nor are there any
material proposed additional tax assessments against the Company and
any of its Subsidiaries.
(u) The Shares have been or will be duly authorized for
quotation on the National Association of Securities Dealers Automated
Quotation ("Nasdaq") National Market System, subject to official Notice
of Issuance. A registration statement has been filed on Form 8-A
pursuant to Section 12 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), which registration statement complies in
all material respects with the Exchange Act.
(v) The books, records and accounts of the Company and
its Subsidiaries accurately and fairly reflect, in reasonable detail,
the transactions in, and dispositions of, the assets of, and the
results of operations of, the Company and its Subsidiaries. The Company
and each of its Subsidiaries 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 authorizations, (ii) transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally
accepted accounting principles and to maintain asset accountability,
(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 the existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences.
(w) The Company and its Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and
risks and in such amounts as are customary in the businesses in which
they are engaged or propose to engage after giving effect to the
transactions described in the Prospectus; all policies of insurance and
fidelity or surety bonds insuring the Company or any of its
subsidiaries or the Company's or its subsidiaries' respective
businesses, assets, employees, officers and directors are in full force
and effect; the Company and each of its subsidiaries are in compliance
with the terms of such policies and instruments in all material
respects; and to the Company's knowledge, neither the Company nor any
Subsidiary will be unable to renew its existing insurance coverage as
and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost
that would have a Material Adverse Effect. Neither the Company nor any
Subsidiary has been denied any insurance coverage which it has sought
or for which it has applied.
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(x) Each approval, consent, order, authorization,
designation, declaration or filing of, by or with any regulatory,
administrative or other governmental body necessary in connection with
the execution and delivery by the Company of this Agreement and the
consummation of the transactions herein contemplated required to be
obtained or performed by the Company (except such additional steps as
may be required by the National Association of Securities Dealers, Inc.
(the "NASD") or may be necessary to qualify the Shares for public
offering by the Underwriters under the state securities or Blue Sky
laws) has been obtained or made and is in full force and effect.
(y) There are no affiliations with the NASD among the
Company's officers, directors or, to the knowledge of the Company, any
five percent or greater stockholder of the Company, except as set forth
in the Registration Statement or otherwise disclosed in writing to the
Underwriter.
(z) (i) Each of the Company and its Subsidiaries is in
compliance in all material respects with all rules, laws and regulation
relating to the use, treatment, storage and disposal of toxic
substances and protection of health or the environment ("Environmental
Law") which are applicable to its business; (ii) neither the Company
nor its Subsidiaries has received any notice from any governmental
authority or third party of an asserted claim under Environmental Laws;
(iii) each of the Company and its Subsidiaries has received all
material permits, licenses or other approvals required of it under
applicable Environmental Laws to conduct its business and is in
material compliance with all terms and conditions of any such permit,
license or approval; (iv) to the Company's knowledge, no facts
currently exist that will require the Company or its Subsidiaries to
make future material capital expenditures to comply with Environmental
Laws; and (v) no property which is or has been owned, leased or
occupied by the Company or its Subsidiaries has been designated as a
Superfund site pursuant to the Comprehensive Environmental Response,
Compensation of Liability Act of 1980, as amended (42 U.S.C. Section
9601, et. seq.) or otherwise designated as a contaminated site under
applicable state or local law. To the Company's knowledge, neither the
Company nor any of its Subsidiaries has been named as a "potentially
responsible party" under the CER, CLA 1980.
(aa) In the ordinary course of its business, the Company
periodically reviews the effect of Environmental Laws on the business,
operations and properties of the Company and its subsidiaries, in the
course of which the Company identifies and evaluates associated costs
and liabilities (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws, or any permit, license or approval,
any related constraints on operating activities and any potential
liabilities to third parties). On the basis of such review, the Company
has reasonably concluded that such associated costs and liabilities
would not, singly or in the aggregate, have a Material Adverse Effect.
(bb) The Company is not and, after giving effect to the
offering and sale of the
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Shares and the application of proceeds thereof as described in the
Prospectus, will not be an "investment company" within the meaning of
the Investment Company Act of 1940, as amended (the "Investment Company
Act").
(cc) The Company, its Subsidiaries, or, to the Company's
knowledge, any other person associated with or acting on behalf of the
Company or its Subsidiaries including, without limitation, any
director, officer, agent or employee of the Company or its Subsidiaries
has not, directly or indirectly, while acting on behalf of the Company
or its Subsidiaries (i) used any corporate funds for unlawful
contributions, gifts, entertainment or other unlawful expenses relating
to political activity; (ii) made any unlawful payment to foreign or
domestic government officials or employees or to foreign or domestic
political parties or campaigns from corporate funds; (iii) violated any
provision of the Foreign Corrupt Practices Act of 1977, as amended; or
(iv) made any other unlawful payment.
(dd) The Company has reviewed its operations and that of
its Subsidiaries to evaluate the extent to which the business or
operations of the Company or any of its Subsidiaries will be affected
by the Year 2000 Problem (that is, any significant risk that computer
hardware or software applications used by the Company and its
Subsidiaries will not, in the case of dates or time periods occurring
after December 31, 1999, function at least as effectively as in the
case of dates or time periods occurring prior to January 1, 2000); as a
result of such review, (i) the Company does not reasonably believe that
(A) there are any issues related to the Company's preparedness to
address the Year 2000 Problem that are of a character required to be
described or referred to in the Registration Statement or Prospectus
which have not been accurately described in the Registration Statement
or Prospectus and (B) the Year 2000 Problem will have a Material
Adverse Effect, or result in any material loss or interference with the
business or operations of the Company and its Subsidiaries, taken as a
whole; and (ii) the Company reasonably believes that the suppliers,
vendors, customers or other material third parties used or served by
the Company and such Subsidiaries are addressing or will address the
Year 2000 Problem in a timely manner, except to the extent that a
failure to address the Year 2000 by a supplier, vendor, customer or
material third party would not have a Material Adverse Effect.
4. CONDITIONS OF THE UNDERWRITER'S OBLIGATIONS. The
obligation of the Underwriter to purchase the Shares is subject to each of the
following terms and conditions:
(a) Notification that the Registration Statement has
become effective shall have been received by the Underwriter and the
Prospectus Supplement shall have been timely filed with the Commission
in accordance with Section 5(a) of this Agreement.
(b) No order preventing or suspending the use of the
Prospectus shall have been or shall be in effect and no order
suspending the effectiveness of the Registration Statement shall be in
effect and no proceedings for such purpose shall be pending before
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or threatened by the Commission, and any requests for additional
information on the part of the Commission (to be included in the
Registration Statement or the Prospectus or otherwise) shall have been
complied with to the satisfaction of the Commission and the
Underwriter.
(c) The representations and warranties of the Company
contained in this Agreement and in the certificates delivered pursuant
to Section 5(d) shall be true and correct when made and on and as of
the Closing Date as if made on such date. The Company shall have
materially performed all covenants and agreements and satisfied all the
conditions contained in this Agreement required to be performed or
satisfied by them at or before the Closing Date.
(d) The Underwriter shall have received on the Closing
Date a certificate, addressed to the Underwriter and dated the Closing
Date, of the chief executive or chief operating officer or president
and the chief financial officer or chief accounting officer of the
Company to the effect that (i) the signers of such certificate have
carefully examined the Registration Statement, the Prospectus and this
Agreement and that the representations and warranties of the Company in
this Agreement are materially true and correct on and as of the Closing
Date with the same effect as if made on the Closing Date and the
Company has materially performed all covenants and agreements and
materially satisfied all conditions contained in this Agreement
required to be performed or satisfied by it at or prior to the Closing
Date, and (ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and to the best of their
knowledge, no proceedings for that purpose have been instituted or are
pending under the Securities Act.
(e) The Underwriter shall have received, at the time this
Agreement is executed and on the Closing Date a signed letter from
Xxxxxx Xxxxxxxx LLP addressed to the Underwriter and dated,
respectively, the date of this Agreement and the Closing Date, in form
and substance reasonably satisfactory to the Underwriter, confirming
that they are independent accountants within the meaning of the
Securities Act and the Rules, that the response to Item 10 of the
Registration Statement is correct insofar as it relates to them and
stating in effect that:
(i) in their opinion the audited financial
statements and financial statement schedules included or
incorporated by reference in the Registration Statement and
the Prospectus and reported on by them comply as to form in
all material respects with the applicable accounting
requirements of the Securities Act and the Rules;
(ii) on the basis of carrying out certain
procedures but not an examination in accordance with generally
accepted auditing standards which would not necessarily reveal
matters of significance with respect to the comments set forth
in such letter, a reading of the minutes of the meetings of
the stockholders and
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directors of the Company, and inquiries of certain officials
of the Company who have responsibility for financial and
accounting matters of the Company as to transactions and
events subsequent to the date of the latest audited financial
statements, except as disclosed in the Registration Statement
and the Prospectus, nothing came to their attention which
caused them to believe that:
(A) with respect to the Company, there
were, at a specified date not more than three
business days prior to the date of the letter, any
increases in the current liabilities and long-term
liabilities of the Company or any decreases in net
income or in working capital or the stockholders'
equity in the Company, as compared with the amounts
shown on the Company's audited balance sheet for the
fiscal year ended March 31, 1999 and the three months
ended December 31, 1999 incorporated by reference in
the Registration Statement; and
(iii) they have performed certain other procedures
as may be permitted under Generally Acceptable Auditing
Standards as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information derived from the general accounting records of the
Company) set forth or incorporated by reference in the
Registration Statement and the Prospectus and reasonably
specified by the Underwriter agrees with the accounting
records of the Company.
References to the Registration Statement and the
Prospectus in this paragraph (f) are to such documents as
amended and supplemented at the date of the letter.
(g) The Underwriter shall have received on the Closing
Date from Xxxxxxxx & Xxxxxxxx LLP, counsel for the Company, an opinion,
addressed to the Underwriter and dated the Closing Date, and stating in
effect that:
(i) The Company has been duly organized and is
validly existing as a corporation in good standing under the
laws of the State of Delaware.
(ii) The Company has all requisite corporate
power and authority to own, lease and license its assets and
properties and conduct its business as now being conducted and
as described in the Registration Statement and the Prospectus
and to enter into, deliver and perform this Agreement and to
issue and sell the Shares other than those required under the
state and foreign Blue Sky laws.
(iii) The certificates evidencing the Shares are
in due and proper legal form and have been duly authorized for
issuance by the Company; all of the outstanding shares of
Common Stock of the Company have been duly and validly
authorized and issued and are fully paid and nonassessable and
none of them was
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issued in violation of any preemptive or other similar right.
The Shares when issued and sold pursuant to this Agreement
will be duly and validly issued, outstanding, fully paid and
nonassessable and none of them will have been issued in
violation of any preemptive or other similar right. To such
counsel's knowledge, except as disclosed in the Registration
Statement and the Prospectus, there are no preemptive or other
rights to subscribe for or to purchase or any restriction upon
the voting or transfer of any securities of the Company
pursuant to the Company's Restated Certificate of
Incorporation or by-laws or other governing documents or any
agreements or other instruments to which the Company is a
party or by which it is bound. To such counsel's knowledge,
except as disclosed in the Registration Statement and the
Prospectus, there is no outstanding option, warrant or other
right calling for the issuance of, and no commitment, plan or
arrangement to issue, any share of stock of the Company or any
security convertible into, exercisable for, or exchangeable
for stock of the Company. The Common Stock and the Shares
conform in all material respects to the descriptions thereof
contained in the Registration Statement and the Prospectus.
(iv) All necessary corporate action has been duly
and validly taken by the Company to authorize the execution,
delivery and performance of this Agreement and the issuance
and sale of the Shares. This Agreement has been duly and
validly authorized, executed and delivered by the Company and
this Agreement constitutes the legal, valid and binding
obligation of the Company, enforceable against the Company in
accordance with its terms except as such enforceability may be
limited by applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws
affecting the enforcement of creditors' rights generally and
by general equitable principles.
(v) To such counsel's knowledge, the Company is
not in violation of any term or provision of its charter or
by-laws or any franchise, license, permit, judgment, decree,
order, statute, rule or regulation, where the consequences of
such violation, individually or in the aggregate, would have a
Material Adverse Effect.
(vi) No consent, approval, authorization or order
of any court or governmental agency or regulatory body is
required for the execution, delivery or performance of this
Agreement by the Company or the consummation of the
transactions contemplated hereby or thereby, except such as
have been obtained under the Securities Act and such as may be
required under state securities or Blue Sky laws in connection
with the purchase and distribution of the Shares by the
several Underwriters.
(vii) The issue and sale by the Company of the
Shares as contemplated by this Agreement will not conflict
with, or result in a breach of, the Certificate
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of Incorporation or Bylaws of the Company or any agreement or
instrument filed as an exhibit to the Company's Annual Report
on Form 10-K for the fiscal year ended March 31, 1999 or any
applicable law or regulation, or so far as is known to us, any
order, writ, injunction or decree of any court or governmental
instrumentality.
(viii) To such counsel's knowledge, there is no
litigation or governmental or other proceeding or
investigation, before any court or before or by any public
body or board pending or threatened against, or involving the
assets, properties or businesses of, the Company which would
have a Material Adverse Effect upon the transactions
contemplated by this Agreement.
(ix) The Registration Statement, the Prospectus,
the Prospectus Supplement, each amendment or supplement
thereto and each of the documents incorporated by reference
(except for the financial statements and schedules and other
financial and statistical data included therein, as to which
such counsel expresses no opinion) comply as to form in all
material respects with the requirements of the Securities Act
and the Rules.
(x) The Registration Statement is effective
under the Securities Act, and to such counsel's knowledge, no
stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose
have been instituted or are threatened, pending or
contemplated. Any required filing of the Prospectus and any
supplement thereto pursuant to Rule 424(b) under the
Securities Act has been made in the manner and within the time
period required by such Rule 424(b).
(xi) The Shares have been approved for listing on
the Nasdaq National Market.
(xii) The capital stock of the Company conforms in
all material respects to the description thereof contained in
the Prospectus under the caption "Description of Capital
Stock."
(xiii) The Company is not 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.
To the extent deemed advisable by such counsel, they may rely
as to matters of fact on certificates of responsible officers of the
Company and public officials and on the opinions of other counsel
satisfactory to the Underwriter as to matters which are governed by
laws other than the laws of the State of New York, the General
Corporation Law of the State of Delaware and the Federal laws of the
United States; provided that such counsel shall state that in their
opinion the Underwriter and they are justified in relying on such other
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opinions. Copies of such certificates and other opinions shall be
furnished to the Underwriter and counsel for the Underwriter.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of
the Company, representatives of the Underwriter and representatives of
the independent certified public accountants of the Company, at which
conferences the contents of the Registration Statement and the
Prospectus and related matters were discussed and, although such
counsel is not passing upon and does not assume any responsibility for
the accuracy, completeness or fairness of the statements contained in
the Registration Statement and the Prospectus (except as specified in
the foregoing opinion), on the basis of the foregoing, no facts have
come to the attention of such counsel which lead such counsel to
reasonably believe that the Registration Statement at the time it
became effective (except with respect to the financial statements and
notes and schedules thereto and other financial data, as to which such
counsel need express no belief) contained any untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, or
that the Prospectus as amended or supplemented (except with respect to
the financial statements, notes and schedules thereto and other
financial data, as to which such counsel need make no statement) on the
date thereof contained any untrue statement of a material fact or
omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
(h) All proceedings taken in connection with the sale of
the Shares as herein contemplated shall be reasonably satisfactory in
form and substance to the Underwriter and its counsel and the
Underwriter shall have received from Pillsbury Madison & Sutro LLP a
favorable opinion, addressed to the Underwriter and dated such Closing
Date, with respect to the Shares, the Registration Statement and the
Prospectus, and such other related matters, as the Underwriter may
reasonably request, and the Company shall have furnished to Pillsbury
Madison & Sutro LLP such documents as they may reasonably request for
the purpose of enabling them to pass upon such matters.
(i) The Company shall have furnished or caused to be
furnished to the Underwriter such further certificates or documents as
the Underwriter shall have reasonably requested.
5. COVENANTS OF THE COMPANY.
(a) The Company covenants and agrees as follows:
(i) The Company will cause the Prospectus
Supplement to be filed (but only if the Underwriter or its
counsel has not reasonably objected thereto by notice to the
Company after having been furnished a copy a reasonable time
prior to filing) and will notify the Underwriter promptly of
such filing.
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(ii) The Company shall promptly advise the
Underwriter in writing (i) when any amendment to the
Registration Statement shall have become effective or any
subsequent supplement to the Prospectus has been filed, (ii)
of any request by the Commission for any amendment of the
Registration Statement or the Prospectus or for any additional
information, (iii) of the issuance of any stop order
suspending the effectiveness of the Registration Statement or
the institution or threatening of any proceeding for that
purpose and (iv) of the receipt by the Company of any
notification with respect to the suspension of the
qualification of the Shares for sale in any jurisdiction or
the initiation or threatening of any proceeding for such
purpose. The Company shall not file any amendment of the
Registration Statement or supplement to the Prospectus unless
the Company has furnished the Underwriter a copy for its
review prior to filing and shall not file any such proposed
amendment or supplement to which the Underwriter reasonably
object. The Company shall use its best efforts to prevent the
issuance of any such stop order and, if issued, to obtain as
soon as possible the withdrawal thereof.
(iii) If, at any time when a prospectus relating
to the Shares is required to be delivered under the Securities
Act and the Rules, any event occurs as a result of which the
Prospectus as then amended or supplemented would include any
untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein in the
light of the circumstances under which they were made not
misleading, or if it shall be necessary to amend or supplement
the Prospectus to comply with the Securities Act or the Rules,
the Company promptly shall prepare and file with the
Commission, subject to the second sentence of paragraph (ii)
of this Section 5(a), an amendment or supplement which shall
correct such statement or omission or an amendment which shall
effect such compliance.
(iv) The Company shall make generally available
to its security holders and to the Underwriter as soon as
practicable, but not later than 45 days after the end of the
12-month period beginning at the end of the fiscal quarter of
the Company during which the Effective Date occurs (or 90 days
if such 12-month period coincides with the Company's fiscal
year), an earning statement (which need not be audited) of the
Company, covering such 12-month period, which shall satisfy
the provisions of Section 11(a) of the Securities Act or Rule
158 of the Rules.
(v) The Company shall furnish to the Underwriter
and counsel for the Underwriter, without charge, signed copies
of the Registration Statement (including all exhibits thereto
and amendments thereof) and to each other Underwriter a copy
of the Registration Statement (without exhibits thereto) and
all amendments thereof and, so long as delivery of a
prospectus by an Underwriter or dealer may be required by the
Securities Act or the Rules, as many copies of
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the Prospectus and any amendments thereof and supplements
thereto as the Underwriter may reasonably request.
(vi) The Company shall reasonably cooperate with
the Underwriter and their counsel in endeavoring to qualify
the Shares for offer and sale in connection with the offering
under the laws of such jurisdictions as the Underwriter may
designate and shall maintain such qualifications in effect so
long as required for the distribution of the Shares; provided,
however, that the Company shall not be required in connection
therewith, as a condition thereof, to qualify as a foreign
corporation or to execute a general consent to service of
process in any jurisdiction or subject itself to taxation as
doing business in any jurisdiction.
(vii) Without the prior written consent of the
Underwriter, for a period of 90 days after the date of this
Agreement, the Company shall not issue, sell or register with
the Commission (other than on Form S-8 or on any successor
form), or otherwise dispose of, directly or indirectly, any
equity securities of the Company (or any securities
convertible into, exercisable for or exchangeable for equity
securities of the Company), except for the issuance of the
Shares pursuant to the Registration Statement and the issuance
of shares pursuant to the Company's existing stock option plan
or bonus plan as described in the Registration Statement and
the Prospectus.
(viii) On or before completion of this offering,
the Company shall make all filings required under applicable
securities laws and by the Nasdaq National Market (including
any required registration under the Exchange Act).
(ix) The Company will apply the net proceeds from
the offering of the Shares in the manner set forth under "Use
of Proceeds" in the Prospectus.
(b) The Company agrees to pay, or reimburse if paid by
the Underwriter, whether or not the transactions contemplated hereby
are consummated or this Agreement is terminated, all costs and expenses
incident to the public offering of the Shares and the performance of
the obligations of the Company under this Agreement including those
relating to: (i) the preparation, printing, filing and distribution of
the Registration Statement including all exhibits thereto, the
Prospectus, all amendments and supplements to the Registration
Statement and the Prospectus, and the printing, filing and distribution
of this Agreement; (ii) the preparation and delivery of certificates
for the Shares to the Underwriter; (iii) the registration or
qualification of the Shares for offer and sale under the securities or
Blue Sky laws of the various jurisdictions referred to in Section
5(a)(vi), including the reasonable fees and disbursements of counsel
for the Underwriter in connection with such registration and
qualification and the preparation, printing, distribution and shipment
of preliminary and supplementary Blue Sky memoranda; (iv) the
furnishing (including costs of shipping and mailing) to the Underwriter
of copies of the Prospectus and all amendments or supplements to the
Prospectus, and of the several documents required by this Section to
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be so furnished, as may be reasonably requested for use in connection
with the offering and sale of the Shares by the Underwriter or by
dealers to whom Shares may be sold; (v) the filing fees of the NASD in
connection with its review of the terms of the public offering and
reasonable fees and disbursements of counsel for the Underwriters in
connection with such review; (vi) inclusion of the Shares for quotation
on the Nasdaq National Market; and (vii) all transfer taxes, if any,
with respect to the sale and delivery of the Shares by the Company to
the Underwriter. Subject to the provisions of Section 8, the
Underwriter agrees to pay, whether or not the transactions contemplated
hereby are consummated or this Agreement is terminated, all costs and
expenses incident to the performance of the obligations of the
Underwriter under this Agreement not payable by the Company pursuant to
the preceding sentence, including, without limitation, the fees and
disbursements of counsel for the Underwriter.
6. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless the
Underwriter and each person, if any, who controls the Underwriter
within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act against any and all losses, claims, damages and
liabilities, joint or several (including any reasonable investigation,
legal and other expenses incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claim
asserted), to which they, or any of them, may become subject under the
Securities Act, the Exchange Act or other Federal or state law or
regulation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities arise out of or are based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in
the Registration Statement or the Prospectus or any amendment thereof
or supplement thereto, or in any Blue Sky application or other
information or other documents executed by the Company filed in any
state or other jurisdiction to qualify any or all of the Shares under
the securities laws thereof (any such application, document or
information being hereinafter referred to as a "Blue Sky Application")
or arise out of or are based upon any omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, (ii) in whole
or in part upon any material breach of the representations and
warranties set forth in Section 3 hereof, or (iii) in whole or in part
upon any failure of the Company to materially perform any of its
obligations hereunder or under law; provided, however, that such
indemnity shall not inure to the benefit of the Underwriter (or any
person controlling the Underwriter) on account of any losses, claims,
damages or liabilities arising from the sale of the Shares to any
person by the Underwriter if such untrue statement or omission or
alleged untrue statement or omission was made in the Registration
Statement or the Prospectus, or such amendment or supplement thereto,
or in any Blue Sky Application in reliance upon and in conformity with
information furnished in writing to the Company by the Underwriter on
behalf of the Underwriter specifically for use therein.
(b) The Underwriter agrees to indemnify and hold harmless
the Company and
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each person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act,
each director of the Company, and each officer of the Company who signs
the Registration Statement, to the same extent as the foregoing
indemnity from the Company to the Underwriter, but only insofar as such
losses, claims, damages or liabilities arise out of or are based upon
any untrue statement or omission or alleged untrue statement or
omission which was made in the Registration Statement or the
Prospectus, or any amendment thereof or supplement thereto, contained
in the (i) concession and reallowance figures appearing under the
caption "Underwriting" and (ii) the stabilization information contained
under the caption "Underwriting" in the Prospectus; provided, however,
that the obligation of the Underwriter to indemnify the Company
(including any controlling person, director or officer thereof) shall
be limited to the net proceeds received by the Company from the
Underwriter.
(c) Any party that proposes to assert the right to be
indemnified under this Section will, promptly after receipt of notice
of commencement of any action, suit or proceeding against such party in
respect of which a claim is to be made against an indemnifying party or
parties under this Section, notify each such indemnifying party of the
commencement of such action, suit or proceeding, enclosing a copy of
all papers served. No indemnification provided for in Section 6(a) or
6(b) shall be available to any party who shall fail to give notice as
provided in this Section 6(c) if the party to whom notice was not given
was unaware of the proceeding to which such notice would have related
and was prejudiced by the failure to give such notice but the omission
so to notify such indemnifying party of any such action, suit or
proceeding shall not relieve it from any liability that it may have to
any indemnified party for contribution or otherwise than under this
Section. In case any such action, suit or proceeding 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, and, to the extent that it shall wish,
jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof and
the approval by the indemnified party of such counsel, the indemnifying
party shall not be liable to such indemnified party for any legal or
other expenses, except as provided below and except for the reasonable
costs of investigation subsequently incurred by such indemnified party
in connection with the defense thereof. The indemnified party shall
have the right to employ its counsel in any such action, but the fees
and expenses of such counsel shall be at the expense of such
indemnified party unless (i) the employment of counsel by such
indemnified party has been authorized in writing by the indemnifying
parties, (ii) the indemnified party shall have been advised by counsel
that there may be one or more legal defenses available to it which are
different from or in addition to those available to the indemnifying
party (in which case the indemnifying parties shall not have the right
to direct the defense of such action on behalf of the indemnified
party) or (iii) the indemnifying parties shall not have employed
counsel to assume the defense of such action within a reasonable time
after notice of the commencement thereof, in each of which cases the
reasonable fees and expenses of
- 19 -
counsel shall be at the expense of the indemnifying parties. An
indemnifying party shall not be liable for any settlement of any
action, suit, proceeding or claim effected without its written consent,
which consent shall not be unreasonably withheld or delayed.
7. CONTRIBUTION. In order to provide for just and
equitable contribution in circumstances in which the indemnification
provided for in Section 6(a) or 6(b) is due in accordance with its
terms but for any reason is held to be unavailable to or insufficient
to hold harmless an indemnified party under Section 6(a) or 6(b), then
each indemnifying party shall contribute to the aggregate losses,
claims, damages and liabilities (including any investigation, legal and
other expenses reasonably incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claims
asserted, but after deducting any contribution received by any person
entitled hereunder to contribution from any person who may be liable
for contribution) to which the indemnified party may be subject in such
proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Underwriter on the other from
the offering of the Shares or, if such allocation is not permitted by
applicable law or indemnification is not available as a result of the
indemnifying party not having received notice as provided in Section 6
hereof, in such proportion as is appropriate to reflect not only the
relative benefits referred to above but also the relative fault of the
Company on the one hand and the Underwriter on the other in connection
with the statements or omissions which resulted in such losses, claims,
damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company
and the Underwriter shall be deemed to be in the same proportion as (x)
the total proceeds from the offering (net of underwriting discounts but
before deducting expenses) received by the Company as set forth in the
table on the cover page of the Prospectus, bear to (y) the underwriting
discounts received by the Underwriter, as set forth in the table on the
cover page of the Prospectus. The relative fault of the Company or the
Underwriters shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact
related to information supplied by the Company or the Underwriters and
the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The
Company and the Underwriter agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by
pro rata allocation (even if the Underwriter 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.
Notwithstanding the provisions of this Section 7, (i) in no case shall
the Underwriter be liable or responsible for any amount in excess of
the underwriting discount applicable to the Shares purchased by the
Underwriter hereunder and (ii) the Company shall be liable and
responsible for any amount in excess of such underwriting discount;
provided, however, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. For purposes of
this Section 7, each person, if any, who controls the Underwriter
within the meaning of Section 15 of the Securities Act or Section 20(a)
of the Exchange Act shall have the same
- 20 -
rights to contribution as the Underwriter, and each person, if any, who
controls the Company within the meaning of the Section 15 of the
Securities Act or Section 20(a) of the Exchange Act, each officer of
the Company who shall have signed the Registration Statement and each
director of the Company shall have the same rights to contribution as
the Company, subject in each case to clauses (i) and (ii) in the
immediately preceding sentence of this Section 7. Any party entitled to
contribution will, promptly after receipt of notice of commencement of
any action, suit or proceeding against such party in respect of which a
claim for contribution may be made against another party or parties
under this Section, notify such party or parties from whom contribution
may be sought, but the omission so to notify such party or parties from
whom contribution may be sought shall not relieve the party or parties
from whom contribution may be sought from any other obligation it or
they may have hereunder or otherwise than under this Section. No party
shall be liable for contribution with respect to any action, suit,
proceeding or claim settled without its written consent.
8. TERMINATION. This Agreement may be terminated with
respect to the Shares to be purchased on a Closing Date by the Underwriter by
notifying the Company at any time
(a) in the absolute discretion of the Underwriter at or
before any Closing Date: (i) if on or prior to such date, any domestic
or international event or act or occurrence has materially disrupted,
or in the opinion of the Underwriter will in the future materially
disrupt, the securities markets; (ii) if there has occurred any new
outbreak or material escalation of hostilities or other calamity or
crisis the effect of which on the financial markets of the United
States is such as to make it, in the judgment of the Underwriter,
inadvisable to proceed with the offering; (iii) if there shall be such
a material adverse change in general financial, political or economic
conditions or the effect of international conditions on the financial
markets in the United States is such as to make it, in the judgment of
the Underwriter, inadvisable or impracticable to market the Shares;
(iv) if trading in the Shares has been suspended by the Commission or
trading generally on the New York Stock Exchange, Inc., on the American
Stock Exchange, Inc. or the Nasdaq National Market has been suspended
or limited, or minimum or maximum ranges for prices for securities
shall have been fixed, or maximum ranges for prices for securities have
been required, by said exchanges or by order of the Commission, the
National Association of Securities Dealers, Inc., or any other
governmental or regulatory authority; or (v) if a banking moratorium
has been declared by any state or Federal authority; or (vi) if, in the
reasonable judgment of the Underwriter, there has occurred a Material
Adverse Effect, or
(b) at or before any Closing Date, that any of the
conditions specified in Section 4 shall not have been fulfilled when
and as required by this Agreement.
If this Agreement is terminated pursuant to any of its
provisions, the Company shall not be under any liability to the Underwriter, and
the Underwriter shall not be under any liability to the Company, except that (y)
if this Agreement is terminated by the Underwriter because
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of any failure, refusal or inability on the part of the Company to comply with
the terms or to fulfill any of the conditions of this Agreement, the Company
will reimburse the Underwriter for all reasonable out-of-pocket expenses
(including the reasonable fees and disbursements of its counsel) incurred by it
in connection with the proposed purchase and sale of the Shares or in
contemplation of performing its obligations hereunder and (z) if the Underwriter
failed or refused to purchase the Shares agreed to be purchased by it under this
Agreement, without some reason sufficient hereunder to justify cancellation or
termination of its obligations under this Agreement, it shall not be relieved of
liability to the Company for damages occasioned by its failure or refusal.
9. MISCELLANEOUS. The respective agreements,
representations, warranties, indemnities and other statements of the Company or
its officers and of the Underwriter set forth in or made pursuant to this
Agreement shall remain in full force and effect, regardless of any investigation
made by or on behalf of the Underwriter or the Company or any of the officers,
directors or controlling persons referred to in Sections 6 and 7 hereof, and
shall survive delivery of and payment for the Shares. The provisions of Sections
5(b), 6, 7 and 8 shall survive the termination or cancellation of this
Agreement.
This Agreement has been and is made for the benefit of the
Underwriter, the Company and their respective successors and assigns, and, to
the extent expressed herein, for the benefit of persons controlling the
Underwriter, or the Company, and directors and officers of the Company, and
their respective successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. The term "successors and
assigns" shall not include any purchaser of Shares from the Underwriter merely
because of such purchase.
All notices and communications hereunder shall be in writing
and mailed or delivered or by telephone or telegraph if subsequently confirmed
in writing, (a) if to the Underwriter, c/o Xxxx Xxxxxxxx Xxxxxxx, a division of
Xxxxxxxx Incorporated, 00 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000,
Attention: Xxx Xxxxxx, with a copy to Xxxxxxx X. Xxxx, Pillsbury Madison & Sutro
LLP, 00 Xxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, and (b) if to the
Company, to its agent for service as such agent's address appears on the cover
page of the Registration Statement with a copy to Xxxxx Xxxx, Xxxxxxxx &
Xxxxxxxx LLP, 000 Xxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000.
This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without regard to principles
of conflict of laws.
This Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
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Please confirm that the foregoing correctly sets forth the agreement
among us.
Very truly yours,
DIGITAL MICROWAVE CORPORATION
By /s/ Xxxx X. Xxxxxxx
----------------------------------
Name Xxxx X. Xxxxxxx
---------------------------------
Its Senior Vice President and Chief
---------------------------------
Financial Officer
------------------
Confirmed:
XXXX XXXXXXXX XXXXXXX
a division of Xxxx Xxxxxxxx Incorporated
By /s/ Xxxx Xxxxxx
-------------------------------------
Title: Senior Managing Director
---------------------------------
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