Exhibit 1.2
DIGITAL MICROWAVE CORPORATION
COMMON STOCK
UNDERWRITING AGREEMENT
[Date]
[Names and Addresses of
Representatives]
Dear Sirs:
Digital Microwave Corporation, a Delaware corporation (the "Company"), proposes
to issue up to _________ shares of its Common Stock, par value $0.01 per share
(the "Common Stock"), of which __________ shares of Common Stock would be issued
in connection with the sale of the Firm Shares (as hereinafter defined) and up
to _______ shares of Common Stock would be issued in connection with any sale of
Additional Shares (as hereinafter defined).
The Company proposes to sell to the several underwriters named in Schedule I
hereto (the "Underwriters"), for whom you are acting as representatives (the
"Representatives") _________ of the shares of Common Stock (the "Firm Shares").
The Company also proposes to issue and sell to the several Underwriters not more
than an additional ___________ of the shares of Common Stock (the "Additional
Shares") if and to the extent that the Representatives shall have determined to
exercise, on behalf of the Underwriters, the right to purchase such shares of
Common Stock granted to the Underwriters in Article II hereof. The Firm Shares
and the Additional Shares are hereinafter collectively referred to as the
"Common Shares".
The Company has filed with the Securities and Exchange Commission (the
"Commission") a "shelf" registration statement on Form S-3, including a
prospectus, relating (among other securities) to the Common Shares, which
registration statement has become effective, and will promptly file with the
Commission a prospectus supplement specifically relating to the Common Shares
pursuant to Rule 424 under the Securities Act of 1933, as amended (the
"Act"). As used in this Agreement, the term "Registration Statement" means
such registration statement, including exhibits, financial statements,
schedules and documents incorporated by reference therein, as amended to the
date hereof. The term "Basic Prospectus" means the prospectus included in
the Registration Statement. The term "Prospectus" means the Basic Prospectus
together with the prospectus supplement specifically relating to the Common
Shares as filed with the Commission pursuant to such Rule 424. The term
"preliminary prospectus" means any preliminary prospectus supplement
specifically relating to the Common Shares together with the Basic
Prospectus. Any reference herein to any preliminary prospectus or the
Prospectus shall be deemed to refer to and include the documents incorporated
by reference therein as of the date of such preliminary prospectus or the
Prospectus, as the case may be.
I.
The Company represents and warrants to each of the Underwriters that:
(a) The Registration Statement has become effective; no stop order suspending
the effectiveness of the Registration Statement is in effect; and no
proceedings for such purpose are pending before or threatened by the
Commission.
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(b) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the State of Delaware, has the
corporate power and authority to own its property and to conduct its business
as described in the Prospectus and is duly qualified to transact business and
is in good standing in each jurisdiction in which the conduct of its business
or its ownership or leasing of property requires such qualification, except
to the extent that the failure to be so qualified or be in good standing
would not have a material adverse effect on the Company and its subsidiaries,
taken as a whole.
(c) The authorized capital stock of the Company and the Common Shares
materially conform as to legal matters to the descriptions thereof contained
in the Prospectus.
(d) The Common Shares have been duly authorized and, when the Common Shares
are issued and delivered in accordance with the terms of this Agreement, the
Common Shares will be validly issued, fully paid and non-assessable, and the
issuance of such Common Shares is not subject to any preemptive or similar
rights.
(e) This Agreement has been duly authorized, executed and delivered by the
Company.
(f) The execution and delivery by the Company of, and the performance by the
Company of its obligations under, this Agreement will not contravene any
provision of applicable law or the articles of incorporation or by-laws of
the Company or any order or decree of any governmental body, agency or court
having jurisdiction over the Company or any subsidiary, and no consent,
approval or authorization or order of, or qualification with, any
governmental body or agency is required for the performance by the Company of
its obligations under this Agreement, except such as have been obtained under
the Act and such as may be required by the securities or Blue Sky laws of the
various states in connection with the offer and sale of the Common Shares.
(g) There has not been any material adverse change, or any development
involving a prospective material adverse change, in the condition, financial
or otherwise, or in the earnings, business or operations of the Company and
its subsidiaries, taken as a whole, from that set forth in the Prospectus.
(h) There are no legal or governmental proceedings pending or threatened to
which the Company or to which any of the properties of the Company is subject
that are required to be described in the Registration Statement or the
Prospectus and are not so described or any statutes, regulations, contracts
or other documents that are required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the Registration
Statement that are not described or filed as required.
(i) The Company has all necessary consents, authorizations, approvals,
orders, certificates and permits of and from, and has made all declarations
and filings with, all federal, state, local and other governmental
authorities, all self-regulatory organizations and all courts and other
tribunals, to own, lease, license and use its properties and assets and to
conduct its business in the manner described in the Prospectus, except to the
extent that the failure to obtain or file would not have a material adverse
effect on the Company.
(j) (i) Each document, if any, filed or to be filed pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated by reference in the Prospectus complied or will comply when so
filed in all material respects with the Exchange Act and the applicable rules
and regulations of the Commission thereunder, (ii) each part of the
Registration Statement, when such part became effective, did not contain and
each such part, as amended or supplemented, if applicable, will not contain,
any 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, (iii) the Registration Statement and the Prospectus comply and,
as amended or supplemented, if applicable, will comply in all material
respects with the Act and the applicable rules and regulations of the
Commission thereunder and (iv) the Prospectus does not contain and, as
amended or supplemented, if applicable, will not contain any 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,
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except that the representations and warranties set forth in this paragraph
(m) do not apply to statements or omissions in the Registration Statement or
the Prospectus based upon information concerning any Underwriter furnished to
the Company in writing by such Underwriter through you expressly for use
therein.
II.
The Company hereby agrees to sell to the several Underwriters named in
Schedule I hereto, and the Underwriters, upon the basis of the
representations and warranties herein contained, but subject to the
conditions hereinafter stated, agree, severally and not jointly, to purchase
from the Company the respective numbers of Firm Shares set forth opposite
their names in Schedule I hereto at $_____ a share (the "Purchase Price").
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to
sell to the Underwriters the Additional Shares, and the Underwriters shall
have a one-time right to purchase, severally and not jointly, up to _______
Additional Shares at the Purchase Price. Additional Shares may be purchased
as provided in Article IV hereof solely for the purpose of covering
over-allotments made in connection with the offering of the Firm Shares. If
any Additional Shares are to be purchased, each Underwriter agrees, severally
and not jointly, to purchase the number of Additional Shares (subject to such
adjustments to eliminate fractional shares as the Representatives may
determine) that bears the same proportion to the total number of Additional
Shares to be purchased as the number of Firm Shares set forth in Schedule I
hereto opposite the name of such Underwriter bears to the total number of
Firm Shares set forth in Schedule I hereto.
The Company hereby agrees that, without the prior written consent of the
Representatives, it will not file any registration statement with the
Commission in respect of any shares of Common Stock of the Company or offer,
sell, contract to sell or otherwise dispose of any shares of such Common
Stock or any securities convertible into or exercisable or exchangeable for
such Common Stock for a period of ______ days after the date of this
Agreement, other than (i) any shares of such Common Stock sold upon the
exercise of an option or warrant or the conversion of a security outstanding
on the date hereof, (ii) any shares of such Common Stock registered, offered
or issued, or options in respect of such Common Stock granted, in connection
with any employee benefit plans of the Company or any of its subsidiaries
(including employee benefit plans assumed by the Company or any of its
subsidiaries in connection with an acquisition by the Company), or (iii) any
shares of such Common Stock registered, offered or issued in connection with
an acquisition by the Company.
III.
The Company is advised by you that the Underwriters propose to make a public
offering of their respective portions of the Common Shares as soon after this
Agreement has been entered into as in your judgment is advisable. The
Company is further advised by you that the Common Shares are to be offered to
the public initially at $______ per Common Share (the public offering price)
plus accrued dividends, if any, and to certain dealers selected by you at a
price that represents a concession not in excess of $_____ per Common Share
under the public offering price, and that the Underwriters may allow, and
such dealers may reallow, a concession, not in excess of $.____ per Common
Share, to any Underwriter or to certain other dealers.
IV.
Delivery of the Firm Shares shall be made, against payment therefor in
immediately available funds, at the office of _____________________________,
_____________________, at 10:00 A.M., local time, on ___________, ___, or at
such other time on the same or such other date, not later than ____________,
____, as shall be designated in writing by you. The time and date of such
delivery and payment are hereinafter referred to as the Closing Date.
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Delivery of any Additional Shares shall be made, against payment therefor in
immediately available funds, at the office of ______________________,
_______________, at 10:00 A.M., local time, on such date (which may be the
same as the Closing Date but shall in no event be earlier than the Closing
Date nor later than ten business days after the giving of the notice
hereinafter referred to) as shall be designated in a written notice from the
Representatives to the Company of their determination, on behalf of the
Underwriters, to purchase a number, specified in said notice, of Additional
Shares, or on such other date, in any event not later than _____________,
____, as shall be designated in writing by the Representatives. The time and
date of such delivery and payment are hereinafter referred to as the Option
Closing Date. The notice of the determination to exercise the option to
purchase Additional Shares and of the Option Closing Date may be given at any
time within 30 days after the date of this Agreement.
Payment for the Firm Shares and Additional Shares shall be made against
delivery to you on the Closing Date or the Option Closing Date, as the case
may be, for the respective accounts of the several Underwriters of stock
certificates evidencing the Firm Shares or Additional Shares, as the case may
be, registered in such names and in such denominations as you shall request
in writing not later than five full business days prior to the Closing Date
or the Option Closing Date, as the case may be, with any transfer taxes
payable in connection with the transfer of the Common Shares to the
Underwriters duly paid.
V.
The several obligations of the Underwriters hereunder are subject to the
following conditions:
(a) There shall not have occurred any change, or any development involving a
prospective change, in the condition, financial or otherwise, or in the
earnings, business or operations, of the Company and its subsidiaries, taken
as a whole, from that set forth in the Prospectus, that, in your judgment, is
material and adverse and that makes it, in your judgment, impracticable to
market the Common Shares on the terms and in the manner contemplated in the
Prospectus.
(b) The Underwriters shall have received on the Closing Date a certificate,
dated the Closing Date and signed by an executive officer of the Company, to
the effect set forth in clause (a) above and to the effect that the
representations and warranties of the Company contained in this Agreement
shall be true and correct as of the Closing Date and the Company shall have
performed all of its obligations to be performed hereunder on or prior to the
Closing Date.
The officer signing and delivering such certificate may rely upon his
knowledge as to proceedings threatened.
(c) You shall have received on the Closing Date an opinion of Xxxxxxxx &
Xxxxxxxx LLP, dated the Closing Date, to the effect that
(i) the Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the State of Delaware, has the
corporate power and authority to own its property and to conduct its business
as described in the Prospectus and is duly qualified to transact business and
is in good standing in each jurisdiction in which the conduct of its business
or its ownership or leasing of property requires such qualification, except
to the extent that the failure to be so qualified or be in good standing
would not have a material adverse effect on the Company and its subsidiaries
taken as a whole;
(ii) the authorized capital stock of the Company and the Common Shares
materially conform as to legal matters to the descriptions thereof contained
in the Prospectus;
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(iii) the Common Shares have been duly authorized and, when issued and
delivered in accordance with the terms of this Agreement, the Common Shares
will be validly issued, fully paid and non-assessable, and the issuance of
such Common Shares is not subject to any preemptive or similar rights;
(iv) this Agreement has been duly authorized, executed and delivered by the
Company;
(v) the execution and delivery by the Company of, and the performance by the
Company of its obligations under, this Agreement will not contravene any
provision of applicable law or the articles of incorporation or by-laws of
the Company or to such counsel's knowledge, any judgment or decree of any
governmental body, agency or court having jurisdiction over the Company or
any subsidiary, and no consent, approval or authorization or order of, or
qualification with, any governmental body or agency is required for the
performance by the Company of its obligations under this Agreement, except
such as have been obtained under the Act and such as may be required by the
securities or blue sky laws of the various states in connection with the
offer and sale of the Common Shares by the Underwriters;
(vi) such counsel has no reason to believe that the statements (x) in the
Basic Prospectus under "Description of Common Stock" and "Plan of
Distribution" and (y) in the prospectus supplement specifically relating to
the Common Shares under "Description of Capital Stock" and "Underwriters",
and (z) in the Registration Statement in Item 15, insofar as such statements
constitute a summary of the legal matters, documents or proceedings referred
to therein, fairly present the information called for with respect to such
legal matters, documents and proceedings and fairly summarize the matters
referred to therein;
(vii) such counsel does not know of any legal or governmental proceeding
pending or threatened to which the Company is a party or to which any of the
properties of the Company is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described or of any
statutes, regulations, contracts or other documents that are required to be
described in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not described or filed as
required; and
(viii) such counsel (x) is of the opinion that each document, if any, filed
pursuant to the Exchange Act and incorporated by reference in the
Registration Statement and the Prospectus (except for financial statements
and schedules as to which such counsel need not express any opinion) complied
when so filed as to form in all material respects with the Exchange Act and
the rules and regulations of the Commission thereunder, (y) is of the opinion
that the Registration Statement and the Prospectus and any supplements or
amendments thereto (except for financial statements and schedules as to which
such counsel need not express any opinion) comply as to form in all material
respects with the Act and the rules and regulations of the Commission
thereunder and (z) believes that (except for financial statements and
schedules as to which such counsel need not express any belief) the
Registration Statement and the Prospectus, as amended or supplemented, if
applicable, included therein at the time the Registration Statement became
effective did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading and the Prospectus, as amended or
supplemented, if applicable, does not contain any untrue statement of a
material fact or omit 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.
(d) You shall have received on the Closing Date an opinion of
____________________________, counsel for the Underwriters, dated the Closing
Date, covering the matters referred to in subparagraphs (iv), (v) and (vi)
(but only as to the statements (x) in the Basic Prospectus under "Description
of Common Stock" and "Plan of Distribution", and (y) in the prospectus
supplement specifically relating to the Common Shares under "Description of
Capital Stock" and "Underwriters") and clauses (x) and (y) of (viii) of
paragraph (c) above.
With respect to subparagraph (viii) of paragraph (c) above, Xxxxxxxx &
Xxxxxxxx LLP may state that its opinion and belief are based on its
participation in the preparation of the Registration Statement and the
Prospectus and
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any amendments or supplements thereto and documents incorporated therein by
reference and review and discussion of the contents thereof, but are without
independent check or verification, except as specified.
(e) You shall have received on the date of this Agreement a letter dated such
date and also on the Closing Date a letter dated the Closing Date, in each
case in form and substance satisfactory to you, from Xxxxxx Xxxxxxxx LLP,
independent public accountants, containing statements and information of the
type ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial information
contained in or incorporated by reference into the Registration Statement and
the Prospectus.
The several obligations of the Underwriters to purchase Additional Shares
hereunder are subject to the delivery to the Representatives on the Option
Closing Date of such documents as the Representatives may reasonably request
with respect to the good standing of the Company, the due authorization and
issuance of the Additional Shares and other matters related to the issuance
of the Additional Shares.
VI.
In further consideration of the agreements of the Underwriters herein
contained, the Company covenants as follows:
(a) To furnish you and each other Underwriter with copies of the Registration
Statement (including exhibits thereto) and, during the period mentioned in
paragraph (c) below, as many copies of the Prospectus, any documents
incorporated therein by reference and any supplements and amendments thereto
as you may reasonably request.
(b) Before amending or supplementing the Registration Statement or the
Prospectus, to furnish you a copy of each such proposed amendment or
supplement, and to file no such proposed amendment or supplement to which you
reasonably object.
(c) If, during such period after the first date of the public offering of the
Common Shares as in the opinion of your counsel the Prospectus is required by
law to be delivered in connection with sales by an Underwriter or a dealer,
any event shall occur as a result of which it is necessary to amend or
supplement the Prospectus in order to make the statements therein, in the
light of the circumstances when the Prospectus is delivered to a purchaser,
not misleading, or if it is necessary to amend or supplement the Prospectus
to comply with law, forthwith to prepare and furnish, at its own expense
(unless the amendment or supplement is required as the result of the act or
omission of any Underwriter, in which case such Underwriter(s) shall
reimburse the Company for its reasonable expenses incurred to effect the
amendment or supplement), to the Underwriters and to the dealers (whose names
and addresses you will furnish to the Company) to which Common Shares may
have been sold by you on behalf of the Underwriters and to any other dealers
upon request, either amendments or supplements to the Prospectus so that the
statements in the Prospectus as so amended or supplemented will not, in the
light of the circumstances when the Prospectus is delivered to a purchaser,
be misleading or so that the Prospectus will comply with law.
(d) To cooperate with the Underwriters to qualify the Common Shares for offer
and sale under the securities or Blue Sky laws of such jurisdictions as you
shall reasonably request and to pay all reasonable expenses (including
reasonable fees and disbursements of counsel) in connection therewith as well
as all fees payable in connection with the review (if any) of the offering of
the Common Shares by the National Association of Securities Dealers, Inc.
(e) To make generally available to the Company's security holders as soon as
practicable an earnings statement covering the twelve-month period ending
____________, ____, that satisfies the provisions of Section 11(a) of the Act
and the rules and regulations of the Commission thereunder.
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(f) To endeavor to list the Common Shares on the Nasdaq National Market.
VII.
The Company agrees to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of either
Section 15 of the Act or Section 20 of the Exchange Act, from and against any
and all losses, claims, damages and liabilities caused by any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) or any
preliminary prospectus, or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, except insofar as such losses,
claims, damages or liabilities are caused by any such untrue statement or
omission or alleged untrue statement or omission based upon information
relating to the Underwriters furnished to the Company in writing by any
Underwriter through you expressly for use therein.
Each Underwriter agrees, severally and not jointly, to indemnify and hold
harmless the Company, its directors, its officers who sign the Registration
Statement and each person, if any, who controls the Company within the
meaning of either Section 15 of the Act or Section 20 of the Exchange Act to
the same extent as the foregoing indemnity from the Company to each
Underwriter, but only with reference to information relating to such
Underwriter furnished to the Company by such Underwriter through you
expressly for use in the Registration Statement, the Prospectus, any
amendment or supplement thereto, or any preliminary prospectus.
In case any proceeding (including any governmental investigation) shall be
instituted involving any person in respect of which indemnity may be sought
pursuant to either of the two preceding paragraphs, such person (hereinafter
called the indemnified party) shall promptly notify the person against whom
such indemnity may be sought (hereinafter called the indemnifying party) in
writing and the indemnifying party, upon request of the indemnified party,
shall retain counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnifying party may
designate in such proceeding and shall pay the fees and disbursements of such
counsel related to such proceeding. In any such proceeding, any indemnified
party shall have the right to retain its own counsel, but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless (i) the indemnifying party and the indemnified party shall have
mutually agreed to the retention of such counsel or (ii) the named parties to
any such proceeding (including any impleaded parties) conclude both the
indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying
party shall not, in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the fees and expenses of more than one
separate firm (in addition to any local counsel) for all such indemnified
parties, and that all such fees and expenses shall be reimbursed as they are
incurred. In the case of any such separate firm for the Underwriters and such
control persons of Underwriters, such firm shall be designated in writing by
___________________________. In the case of any such separate firm for the
Company, and such directors, officers and control persons of the Company,
such firm shall be designated in writing by the Company. The indemnifying
party shall not be lable for any settlement of any proceeding effected
without its written consent, but if settled with such consent or if there be
a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by
reason of such settlement or judgment. Notwithstanding the foregoing
sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses
of counsel as contemplated by the third sentence of this paragraph, the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of
the aforesaid request and (ii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request prior to the
date of such settlement. No indemnifying party shall, without the prior
written consent of the indemnified party,
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effect any settlement of any pending or threatened proceeding in respect of
which any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such proceeding.
If the indemnification provided for in the first or second paragraph of this
Article VII is unavailable to an indemnified party in respect of any losses,
claims, damages or liabilities referred to therein, then each indemnifying
party under such paragraph, in lieu of indemnifying such indemnified party
thereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities
(i) in such proportion as is appropriate to reflect the relative benefits
received by the Company and the Underwriters from the offering of the Common
Shares 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 of the Underwriters 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 Underwriters shall be
deemed to be in the same respective proportions as the net proceeds from the
offering (before deducting expenses) received by the Company and the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover of the Prospectus, bear to the
aggregate public offering price of the Common Shares. The relative fault of
the Company and the Underwriters 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 or by 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 Underwriters agree that it would not be just and
equitable if contribution pursuant to this Article VII were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of
the losses, claims, damages and liabilities referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations
set forth above, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Article VII, no
Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Common Shares underwritten by it
and distributed to the public were offered to the public exceeds the amount
of any damages that such Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute pursuant to this Article VII are
several, in proportion to the respective number of Firm Shares to be
purchased by each of such Underwriters as set forth opposite each
Underwriter's name in Schedule I hereto plus any additional Firm Shares which
such Underwriter may become obligated to purchase under this Agreement or the
Agreement Among Underwriters, and not joint.
The indemnity and contribution agreements contained in this Article VII and
the representations and warranties of the Company contained in this Agreement
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
any Underwriter or any person controlling any Underwriter or by or on behalf
of the Company, its officers or directors or any other person controlling the
Company and (iii) acceptance of and payment for any of the Common Shares.
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VIII.
This Agreement shall be subject to termination in your absolute discretion,
by notice given to the Company, if (a) after the execution and delivery of
this Agreement and prior to the Closing Date (i) trading generally shall have
been suspended or materially limited on or by, as the case may be, any of the
New York Stock Exchange, the American Stock Exchange, the National
Association of Securities Dealers, Inc., the Chicago Board Options Exchange,
the Chicago Mercantile Exchange or the Chicago Board of Trade, (ii) trading
of any securities of the Company shall have been suspended on any exchange or
in any over-the-counter market, (iii) a general moratorium on commercial
banking activities in New York shall have been declared by either Federal or
New York State authorities, or (iv) there shall have occurred any outbreak or
escalation of hostilities or any change in financial markets or any calamity
or crisis that, in your judgment, is material and adverse and (b) in the case
of any of the events specified in clauses (a)(i) through (iv), such event
singly or together with any other such event makes it, in your judgment,
impracticable to market the Common Shares on the terms and in the manner
contemplated in the Prospectus.
IX.
If, on the Closing Date or the Option Closing Date, as the case may be, any
one or more of the Underwriters shall fail or refuse to purchase Common
Shares that it or they have agreed to purchase hereunder on such date, and
the aggregate number of Common Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than
one-tenth of the aggregate number of the Common Shares to be purchased on
such date, the other Underwriters shall be obligated severally in the
proportions that the number of Firm Shares set forth opposite their
respective names in Schedule I bears to the aggregate number of Firm Shares
set forth opposite the names of all such non-defaulting Underwriters, or in
such other proportions as you may specify, to purchase the Common Shares
which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase on such date; provided that in no event shall the number
of Common Shares that any Underwriter has agreed to purchase pursuant to
Article II be increased pursuant to this Article IX by an amount in excess of
one-ninth of such number of Common Shares without the written consent of such
Underwriter. If, on the Closing Date, or the Option Closing Date, as the case
may be, any Underwriter or Underwriters shall fail or refuse to purchase
Common Shares and the aggregate number of Common Shares with respect to which
such default occurs is more than one-tenth of the aggregate number of Common
Shares to be purchased on such date, and arrangements satisfactory to you and
the Company for the purchase of such Common Shares are not made within 36
hours after such default, this Agreement shall terminate without liability on
the part of any non-defaulting Underwriter or the Company. In any such case
either you or the Company shall have the right to postpone the Closing Date
or the Option Closing Date, as the case may be, but in no event for longer
than seven days, in order that the required changes, if any, in the
Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default
of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of them,
because of any failure or refusal on the part of the Company to comply with
the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters, or such Underwriters
as have so terminated this Agreement with respect to themselves, severally,
for all out-of-pocket expenses (including the fees and disbursements of their
counsel) reasonably incurred by such Underwriters in connection with this
Agreement or the offering contemplated hereunder.
This Agreement may be signed in two or more counterparts, each of which shall
be an original, with the same effect as if the signatures thereto and hereto
were upon the same instrument.
9
This Agreement shall be governed by and construed in accordance with the laws
of the State of California, without regard to conflict of laws principles.
Very truly yours,
DIGITAL MICROWAVE CORPORATION
By: _______________________________
Name: _____________________________
Its: _______________________________
ACCEPTED AND AGREED TO BY:
[Lead Underwriter]
By: _________________________
Name: _______________________
Its: _________________________
Each acting severally on behalf of itself and the several Underwriters named
herein.
10
SCHEDULE I
NUMBER OF
UNDERWRITER COMMON SHARES TOTAL
11
