Exhibit 1
AGERE SYSTEMS INC.
$ % Convertible Subordinated Notes due 2009
Form of
Underwriting Agreement
New York, New York
- , 2002
X.X. Xxxxxx Securities Inc.
Xxxxxxx Xxxxx Xxxxxx Inc.
As Representatives of the several Underwriters,
c/o X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 and
Salmon Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Agere Systems Inc., a Delaware corporation (the "Company"), proposes
to issue and sell to the several underwriters named in Schedule I hereto (the
"Underwriters"), for whom you (the "Representatives") are acting as
representatives, an aggregate of $ % Convertible Subordinated Notes
due 2009 (the "Underwritten Notes"). In addition, the Company proposes to grant
to the Underwriters an option (the "Option") to purchase up to an additional
$ in aggregate principal amount of % Convertible Subordinated Notes
due 2009 to cover over-allotments, if any (the "Optional Notes" and, together
with the Underwritten Notes, the "Notes").
The Notes are to be issued under an indenture (the "Indenture") to
be dated as of the Closing Date (as defined in Section 2) between the Company
and The Bank of New York ("BONY"), as trustee (the "Trustee"). The Notes will be
convertible into fully paid, nonassessable shares of Class A common stock of the
Company (the "Common Stock"), on the terms and subject to the conditions set
forth for each tranche in the Indenture. As used herein, "Conversion Shares"
means the shares of Common Stock into which the Notes are initially convertible.
In connection with the foregoing, the Company has filed with the
Commission a Registration Statement, including a related Prospectus with respect
to the Notes, which Registration Statement is referred to in Section 1(a) of
this Agreement. Any reference herein to the Registration Statement, any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein pursuant to Item 12 of Form S-3
which were filed under the Exchange Act on or before the Effective Date of the
Registration Statement or the issue date of any Preliminary Prospectus or the
Prospectus, as the case may be; and any reference herein to the terms "amend",
"amendment" or "supplement" with respect to the Registration Statement, any
Preliminary Prospectus or the Prospectus shall be
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deemed to refer to and include the filing of any document under the Exchange Act
after the Effective Date of the Registration Statement, or the issue date of any
Preliminary Prospectus or the Prospectus, as the case may be, deemed to be
incorporated therein by reference. Notwithstanding the foregoing, the Company
and the Underwriters hereby acknowledge that any statement contained in a
document incorporated or deemed to be incorporated by reference in the
Registration Statement, any Preliminary Prospectus or the Prospectus shall be
deemed to be modified or superseded for purposes of the Registration Statement,
any Preliminary Prospectus or the Prospectus to the extent that a statement
contained in the Registration Statement, any Preliminary Prospectus or the
Prospectus or in any subsequently filed document or report that also is deemed
to be incorporated by reference in the Registration Statement, any Preliminary
Prospectus or the Prospectus modifies or supercedes such statement.
The Company hereby confirms that at its request Credit Suisse First
Boston Corporation has without compensation acted as "qualified independent
underwriter" (in such capacity, the "Independent Underwriter") within the
meaning of Rule 2720 of the Conduct Rules of the National Association of
Securities Dealers, Inc. (the "NASD") in connection with the offering of the
Notes.
To the extent there are no additional Underwriters listed on
Schedule I other than you, the term Representatives as used herein shall mean
you, as Underwriters, and the terms Representatives and Underwriters shall mean
either the singular or plural as the context requires. The use of the neuter in
this Agreement shall include the feminine and masculine wherever appropriate.
Certain terms used, and not otherwise defined, herein are defined in Section 17
hereof.
1. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, each Underwriter as set forth below
in this Section 1.
(a) The Company has prepared and filed with the Commission a
registration statement (File No. 333-81632) on Form S-3, including a related
preliminary prospectus, for the registration under the Act of the Notes and the
Conversion Shares. The Company may have filed one or more amendments thereto,
including a related preliminary prospectus, each of which has previously been
furnished to you. The Company will next file with the Commission one of the
following: either (1) prior to the Effective Date of such registration
statement, a further amendment to such registration statement (including the
form of final prospectus) or (2) after the Effective Date of such registration
statement, final prospectuses in accordance with Rules 430A and 424(b). In the
case of clause (2), the Company has included in such registration statement, as
amended at the Effective Date, all information (other than Rule 430A
Information) required by the Act and the rules thereunder to be included in such
registration statement and the Prospectus with respect to the Notes and the
offering thereof. As filed, such amendment and form of final prospectus, or such
final prospectus, shall contain all Rule 430A Information, together with all
other such required information with respect to the Notes and the offering
thereof and, except to the extent the Representatives shall agree in writing to
a modification, shall be in all substantive respects in the form furnished to
you prior to the Execution Time or, to the extent not completed at the Execution
Time, shall contain only such specific additional
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information and other changes (beyond that contained in the latest Preliminary
Prospectus) as the Company has advised you, prior to the Execution Time, will be
included or made therein.
(b) On the Effective Date, the Registration Statement did or will,
and when the Prospectus is first filed (if required) in accordance with Rule
424(b) and on the Closing Date (as defined herein), the Prospectus (and any
supplements thereto) will comply in all material respects with the applicable
requirements of the Act and the respective rules thereunder; on the Effective
Date and at the Execution Time, the Registration Statement did not or will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein not misleading; and, on the Effective Date, the Prospectus, if not filed
pursuant to Rule 424(b), did not or will not, and on the date of any filing
pursuant to Rule 424(b) and on the Closing Date, the Prospectus (together with
any supplement thereto) will not, include 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; provided, however, that the Company makes no representations or
warranties as to the information contained in or omitted from the Registration
Statement or the Prospectus (or any supplement thereto) in reliance upon and in
conformity with information furnished herein or in writing to the Company by or
on behalf of any Underwriter through the Representatives specifically for
inclusion in the Registration Statement or the Prospectus (or any supplement
thereto).
(c) The documents incorporated or deemed to be incorporated by
reference in the Registration Statement, any Preliminary Prospectus or the
Prospectus, at the time they were or hereafter are filed or last amended, as the
case may be, with the Commission, complied and will comply in all material
respects with the requirements of the Exchange Act, and the rules and
regulations of the Commission thereunder (the "Exchange Act Regulations"), and
at the time of filing or as of the time of any subsequent amendment, did not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were or are made, not misleading;
and any additional documents deemed to be incorporated by reference in the
Registration Statement or the Prospectus will, if and when such documents are
filed with the Commission, or when amended, as appropriate, comply in all
material respects to the requirements of the Exchange Act and the Exchange Act
Regulations and 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.
(d) No stop order suspending the effectiveness of the Registration
Statement or the 462(b) Registration Statement, if any, is in effect, no order
preventing or suspending the use of any Preliminary Prospectus has been issued
by the Commission, and no proceedings for any such purpose are pending before or
threatened by the Commission.
(e) The Notes and the Indenture have both been duly and validly
authorized by the Company. At the Closing Date, the Notes and the Indenture will
have been duly executed by the Company. When authenticated, the Notes will have
been issued and delivered in the manner provided for in the Indenture. The Notes
and the Indenture each will be the valid and binding obligation of the Company,
enforceable against the Company in accordance with their terms, except as
enforcement thereof may be limited by bankruptcy, fraudulent conveyance,
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insolvency, reorganization, moratorium or other laws relating to or affecting
enforcement of creditors' rights generally or by general equity principles
(regardless of whether enforcement is considered in a proceeding in equity or at
law) and the Notes will be in the form contemplated by, and entitled to the
benefits of, the Indenture.
(f) Except as set forth in the Prospectus and except for stock-based
awards granted under Company benefit plans (and Lucent stock-based awards that
were converted into Company stock-based awards in connection with Lucent's
spin-off of the Company), no options, warrants or other rights to purchase,
agreements or other obligations to issue, or rights to convert any obligations
into or exchange any securities for, shares of capital stock of the Company are
outstanding.
(g) The Company has an authorized capitalization as set forth in the
Prospectus; all of the issued shares of capital stock of the Company conform to
the description thereof contained in (a) in the case of the Common Stock, the
Registration Statement on Form 8-A filed on March 16, 2001 in connection with
the Company's initial public offering of common stock and incorporated by
reference into the Registration Statement and the Prospectus and (b) in the case
of the Class B common stock of the Company, the Registration Statement on Form
8-A filed on May 2, 2002; the Conversion Shares which are authorized on the date
hereof have been duly and validly authorized and reserved for issuance upon
conversion of the Notes; and the holders of outstanding shares of capital stock
of the Company are not entitled to preemptive or other rights to subscribe for
the Notes or Conversion Shares.
(h) Except as described in the Prospectus, there are no contracts,
agreements or understandings between the Company or any of its subsidiaries
listed in Schedule II hereto (the "Significant Subsidiaries") and any person
granting such person the right to require the Company or any of its Significant
Subsidiaries to: (1) file a registration statement under the Act with respect to
any securities of the Company owned or to be owned by such person or (2) include
any securities of the Company owned or to be owned by such person in the
securities registered pursuant to the Registration Statement or (3) include any
securities of the Company owned or to be owned by such person in any securities
being registered pursuant to any other registration statement filed by the
Company or any of its Significant Subsidiaries under the Act.
(i) The Notes, Indenture and Common Stock will conform in all
material respects to the respective statements relating thereto contained in the
Prospectus and the Registration Statement.
(j) The Company is not, and after giving effect to the offering and
sale of the Notes will not be, an "investment company" as defined in the
Investment Company Act.
(k) Neither the Company nor any of its Significant Subsidiaries has
taken and none of such entities will take, directly or indirectly, any action
designed to or which has constituted or which might reasonably be expected to
cause or result in, under the Exchange Act or otherwise, the stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Notes.
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(l) Each of the Company and its Significant Subsidiaries has been
duly incorporated or organized and is validly existing as a corporation, limited
liability company or limited partnership in good standing under the laws of the
jurisdiction in which it is chartered with full corporate power and authority to
own or lease, as the case may be, and to operate its properties and to conduct
its business as described in the Prospectus (as then amended or supplemented),
and is duly registered and qualified to conduct its business as a foreign
corporation, limited liability company or limited partnership and is in good
standing under the laws in each jurisdiction or place where the nature of its
properties or the conduct of its business requires such registration or
qualification, except where the failure so to register or qualify or to be in
good standing would not have a material adverse effect on the condition
(financial or otherwise), business, earnings, properties or results of
operations of the Company and its subsidiaries, taken as a whole ("Material
Adverse Effect").
(m) Neither the execution and delivery of the Indenture or this
Agreement nor the issuance and sale of the Notes nor the issuance of the
Conversion Shares nor the consummation of the transactions herein or therein
contemplated nor the fulfillment of the terms hereof or thereof will conflict
with or result in a breach or violation of any of the terms or provisions of, or
(with the giving of notice or the lapse of time or both) constitute a default
under, (i) any indenture, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or instrument to
which the Company or any of its Significant Subsidiaries is a party or by which
the Company or any of its Significant Subsidiaries is bound or to which any of
the property or assets of the Company or any of its Significant Subsidiaries is
subject, except where such breach, violation or default would not have a
Material Adverse Effect, (ii) the provisions of the Organizational Documents of
the Company or any of its Significant Subsidiaries or (iii) any statute, law,
rule, regulation, or to the Company's knowledge, judgment, order or decree
applicable to the Company or any of its Significant Subsidiaries of any court,
regulatory body, administrative agency, governmental body, arbitrator or other
authority having jurisdiction over the Company or any of its Significant
Subsidiaries or any of its or their properties or assets.
(n) No consent, approval, authorization, filing, order, registration
or qualification of or with any such court or governmental agency or body is
required for the issue and sale of the Notes or Conversion Shares or the
consummation by the Company of the transactions contemplated by this Agreement,
except such as have been obtained under the Act and such as may be required
under the blue sky laws of any jurisdiction in connection with the purchase and
distribution of the Notes in the manner contemplated herein and in the
Prospectus.
(o) Neither the Company nor any of its Significant Subsidiaries is
in violation or default of (i) its Organizational Documents, (ii) the terms of
any indenture, contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or instrument to
which it is a party or by which it is bound or to which any of its properties or
assets is subject or (iii) any statute, law, ordinance, rule, regulation, or to
the Company's knowledge, judgment, order or decree of any court, regulatory
body, administrative agency, governmental body, arbitrator or other authority
having jurisdiction over the Company or any of its Significant Subsidiaries or
any of its or their properties, as applicable, except with respect to clauses
(ii) and (iii) where a violation or default would not have a Material Adverse
Effect.
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(p) PricewaterhouseCoopers LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder.
(q) This Agreement has been duly authorized, executed and delivered
by the Company and constitutes a valid and binding obligation of the Company
enforceable in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally and by general equitable principles.
(r) The consolidated historical financial statements and schedules
of the Company included as part of the Registration Statement or included in the
Prospectus present fairly in all material respects the financial condition,
results of operations and cash flows of the Company as of the dates and for the
periods indicated, comply as to form with the applicable accounting requirements
of the Act and have been prepared in conformity with generally accepted
accounting principles ("GAAP") consistently applied throughout such periods. The
selected financial data set forth under the caption "Selected Financial
Information" in the Prospectus and the Registration Statement fairly present, on
the basis stated in the Prospectus and the Registration Statement, the
information included therein.
(s) The Company and its Significant Subsidiaries own, hold under
license or are otherwise authorized to use, on reasonable terms, all patents,
patent applications, trade and service marks, trade names, copyrights, licenses,
inventions, trade secrets, technology, know-how (including unpatented and/or
unpatentable proprietary or confidential information, systems or procedures) and
other intellectual property (collectively, the "Intellectual Property")
necessary for the conduct of the business of the Company and its Significant
Subsidiaries as now conducted and as proposed in the Prospectus to be conducted,
except where such a failure to own, hold or use would not have a Material
Adverse Effect. Except as disclosed in the Registration Statement, neither the
Company nor any of its Significant Subsidiaries has received any notice or is
otherwise aware of any infringement of or conflict with rights of others with
respect to any Intellectual Property or of any facts or circumstances which
would render any Intellectual Property used by the Company or any of its
Significant Subsidiaries invalid or inadequate to protect the interest of the
Company or any of its Significant Subsidiaries therein, and which infringement
or conflict (if the subject of any unfavorable decision, ruling or finding),
invalidity or inadequacy, singly or in the aggregate, would result in a Material
Adverse Effect.
(t) The Company and each of its Significant Subsidiaries (i) makes
and keeps accurate books and records and (ii) maintains a system of internal
accounting controls sufficient to provide reasonable assurance that (A)
transactions are executed in accordance with management's general or specific
authorization, (B) transactions are recorded as necessary to permit preparation
of its financial statements in conformity with GAAP and to maintain
accountability for assets, (C) access to its assets is permitted only in
accordance with management's general or specific authorization and (D) the
recorded accountability for its assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
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(u) At the date hereof, no subsidiary of the Company other than
those listed in Schedule II hereto would constitute a significant subsidiary (as
such term is defined in Rule 1-02(w) of Regulation S-X) so as to require
separate financial disclosure pursuant to the requirements of Form 10-K.
2. Purchase and Sale.
(a) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company agrees to sell to
each Underwriter, and each Underwriter agrees, severally and not jointly, to
purchase from the Company the aggregate principal amount of the Underwritten
Notes set forth on Schedule I opposite the name of such Underwriter (or such
number increased as set forth in Section 9 hereof), at a purchase price equal to
% of the principal amount of the Notes.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company hereby grants the
Option to the Underwriters to purchase, severally and not jointly, the Optional
Notes at the same price as the Underwriters shall pay for the Underwritten Notes
and the principal amount of the Optional Notes to be sold to each Underwriter
shall be that principal amount which bears the same ratio to the aggregate
principal amount of Optional Notes being purchased as the principal amount of
Underwritten Notes set forth on Schedule I opposite the name of such Underwriter
(or such number increased as set forth in Section 9 hereof) bears to the
aggregate principal amount of Underwritten Notes. The Option may be exercised
only to cover over-allotments in the sale of Underwritten Notes by the
Underwriters. The Option may be exercised once in whole or in part at any time
not more than 30 days subsequent to the date of this Agreement upon notice in
writing or by facsimile by the Representatives to the Company setting forth the
amount (which shall be a whole multiple of $1,000) of Optional Notes as to which
the Underwriters are exercising the Option.
3. Delivery and Payment.
(a) Delivery of and payment for the certificates for the
Underwritten Notes shall be made at 10:00 A.M., New York City time, on ,
2002, or at such time on such later date not later than five Business Days after
the foregoing date as the Representatives shall designate, which date and time
may be postponed by agreement between the Representatives and the Company or as
provided in Section 9 hereof (the date and time of delivery and payment of the
Underwritten Securities being herein called the "Closing Date"). Delivery of the
Underwritten Notes shall be made to the Underwriters against payment by the
Underwriters of the purchase price thereof to or upon the order of the Company
by wire transfer payable in immediately available same-day funds to an account
specified by the Company in writing at least two Business Days in advance of the
Closing Date. Delivery of the Underwritten Notes shall be made through the
facilities of The Depository Trust Company unless the Underwriters shall
otherwise instruct.
The date for the delivery of and payment for the Optional Notes
shall be determined by the Underwriters but shall not be later than five full
Business Days after written notice of election to purchase Optional Notes is
given (the "Option Delivery Date"). Delivery of
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the Optional Notes shall be made to the Underwriters against payment by the
Underwriters of the purchase price thereof to or upon the order of the Company
by wire transfer payable in immediately available same-day funds to an account
specified by the Company in writing at least two Business Days in advance of the
Option Delivery Date. Delivery of the Optional Notes shall be made through the
facilities of The Depository Trust Company unless the Underwriters shall
otherwise instruct.
The Company agrees to have the Underwritten Notes available for
inspection and checking by the Underwriters in New York, New York, not later
than 1:00 P.M. on the Business Day prior to the Closing Date.
4. Offering by the Underwriters. It is understood that the several
Underwriters propose to offer the Notes for sale to the public as set forth in
the Prospectus. The Representatives will notify the Company in writing of the
completion of the offering of the Notes no later than 3 days after such
completion.
5. Agreements of the Company. The Company agrees with the several
Underwriters that:
(a) The Company will use its best efforts to cause the Registration
Statement, if not effective at the Execution Time, and any amendment
thereof, to become effective promptly thereafter. Prior to the termination
of the offering of the Notes, the Company will not file any amendment of
the Registration Statement or supplement to the Prospectus or any Rule
462(b) Registration Statement unless the Company has furnished to you a
copy for your review prior to filing and will not file any such proposed
amendment or supplement to which you reasonably object. Subject to the
foregoing sentence, if the Registration Statement has become or becomes
effective pursuant to Rule 430A, or filing of the Prospectus is otherwise
required under Rule 424(b), the Company will cause the Prospectus,
properly completed, and any supplement thereto to be filed with the
Commission pursuant to the applicable paragraph of Rule 424(b) within the
time period prescribed and will provide evidence satisfactory to the
Representatives of such timely filing. The Company will promptly advise
the Representatives (1) when the Registration Statement, if not effective
at the Execution Time, shall have become effective, (2) when the
Prospectus, and any supplement thereto, shall have been filed (if
required) with the Commission pursuant to Rule 424(b) or when any Rule
462(b) Registration Statement shall have been filed with the Commission,
(3) when, prior to termination of the offering of the Notes, any amendment
to the Registration Statement shall have been filed or become effective,
(4) of any request by the Commission or its staff for any amendment of the
Registration Statement, or any Rule 462(b) Registration Statement, or for
any supplement to the Prospectus or for any additional information, (5) of
the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution or
threatening of any proceeding for that purpose and (6) of the receipt by
the Company of any notification with respect to the suspension of the
qualification of the Notes for sale in any jurisdiction or the institution
or threatening of any proceeding for such purpose. The Company will use
its best efforts to prevent the issuance of any such stop order or the
suspension of any such qualification and, if issued, to obtain as soon as
possible the withdrawal thereof.
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(b) If, at any time when a prospectus is required to be delivered
under the Act, any event occurs as a result of which the Prospectus as
then 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 the Registration
Statement or supplement the Prospectus to comply with the Act or the
Exchange Act or the respective rules thereunder, the Company promptly will
(1) notify the Representatives of such event, (2) prepare and file with
the Commission, subject to the second sentence of paragraph (a) of this
Section 5, an amendment or supplement which will correct such statement or
omission or effect such compliance and (3) supply any supplemented
Prospectus to you in such quantities as you may reasonably request.
(c) As soon as practicable, the Company will make generally
available to its security holders and to the Representatives an earnings
statement or statements of the Company and its subsidiaries which will
satisfy the provisions of Section 11(a) of the Act and Rule 158 under the
Act.
(d) The Company will furnish to the Representatives and counsel for
the Underwriters, without charge, a reasonable number of signed copies of
the Registration Statement (including exhibits thereto) and to each other
Underwriter a copy of the Registration Statement (without exhibits
thereto). The Company will furnish to the Underwriters not later than (A)
6:00 P.M., New York City time, on the date of determination of the public
offering price of the Notes, if such determination occurred at or prior to
12:00 noon, New York City time, on such date or (B) 6:00 P.M., New York
City time, on the Business Day following the date on which the public
offering price of the Notes was determined, if such determination occurred
after 12:00 noon, New York City time, on such date, as many copies of each
Preliminary Prospectus, the Prospectus and any supplement thereto as the
Representatives may reasonably request. So long as delivery of a
prospectus by any underwriter or any dealer may be required by the Act, as
many copies of each Preliminary Prospectus and the Prospectus and any
supplement thereto as the Representatives may reasonably request.
(e) The Company will arrange, if necessary, for the qualification of
the Notes and Conversion Shares for sale under the laws of such
jurisdictions as the Representatives may designate, will maintain such
qualifications of the Notes in effect so long as required for the
distribution of the Notes and will pay any fee of the NASD in connection
with its review, if any, of the Registration Statement and the offering of
the Notes; provided that in no event shall the Company be obligated to
qualify to do business in any jurisdiction where it is not now so
qualified or to take any action that would subject it to service of
process in suits, in each case, other than those arising out of the
offering and sale of the Notes in any jurisdiction where it is not now so
subject.
(f) The Company will not, without the prior written consent of X.X.
Xxxxxx and Xxxxxxx Xxxxx Xxxxxx as Representatives of the Underwriters,
during the period of 90 days following the Execution Time, (i) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or
warrant to purchase or otherwise transfer or dispose of, directly or
indirectly, or
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announce the offering of any shares of any class of common stock of the
Company or any securities convertible into, or exercisable or exchangeable
for shares of any class of common stock of the Company (whether such
shares or any such securities are now owned or hereafter acquired) or (ii)
enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of shares
of any class of the common stock of the Company, whether any such
transaction described in clause (i) or (ii) above is to be settled by
delivery of shares of any class of common stock of the Company or such
other securities, in cash or otherwise; provided, however, that the
Company may issue, sell, contract to sell or otherwise dispose of or grant
options for, shares of any class of common stock of the Company or
securities convertible into, or exchangeable for, shares of any class of
common stock of the Company: (1) pursuant to any benefit plan of the
Company in effect at the Execution Time; and (2) pursuant to any warrants,
stock options or other convertible securities outstanding at the Execution
Time.
6. Conditions to the Obligations of the Underwriters. The
obligations of the Underwriters to purchase the Notes shall be subject to (i)
the accuracy of the representations and warranties on the part of the Company
contained herein as of the Execution Time and the Closing Date, (ii) the
accuracy of the statements of the Company made in any certificates pursuant to
the provisions hereof, (iii) the performance by the Company of its obligations
hereunder and (iv) the additional conditions in paragraphs (a) through (j) of
this Section 6.
(a) If the Registration Statement has not become effective prior to
the Execution Time, unless the Representatives agree in writing to a later
time, such Registration Statement will become effective not later than (i)
6:00 P.M. New York City time on the date of determination of the public
offering price of the Notes, if such determination occurred at or prior to
3:00 P.M. New York City time on such date or (ii) 9:30 A.M. New York City
time on the Business Day following the day on which the public offering
price of the Notes was determined, if such determination occurred after
3:00 P.M. New York City time on such date; if filing of the Prospectus, or
any supplement thereto, is required pursuant to Rule 424(b), such
Prospectus, and any such supplement, will be filed in the manner and
within the time period required by such Rule; any Rule 462(b) Registration
Statement shall have been filed with the Commission; and no stop order
suspending the effectiveness of the Registration Statement or the Rule
462(b) Registration Statement, if any, shall have been issued and no
proceedings for that purpose shall have been instituted or threatened.
(b) The Company shall instruct Xxxxxxx, Swaine & Xxxxx, counsel for
the Company, to furnish, and such counsel shall have furnished, an opinion
to the Representatives dated the Closing Date and addressed to the
Representatives, to the effect that:
(i) the execution and delivery of the Indenture have been duly
authorized by all necessary corporate action of the Company and the
Indenture has been duly executed and delivered by the Company and
qualified under the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"), and is a valid, binding and enforceable
agreement of the Company (subject to applicable
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bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer and other similar laws affecting creditors' rights
generally from time to time in effect and to general principles of
equity, including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing, regardless of whether
in a proceedings in equity or at law);
(ii) the execution and delivery of the Notes have been duly
authorized by all necessary corporate action of the Company, and the
Notes have been duly executed and delivered by the Company and when
authenticated in accordance with the terms of the Indenture and
delivered to and paid for by the Underwriters pursuant to the terms
hereof, will be the valid, binding and enforceable obligations of
the Company, entitled to the benefit of the Indenture;
(iii) the Conversion Shares that are authorized as of the date
hereof have been duly authorized and validly reserved for issuance
upon conversion of the Notes and the Conversion Shares, when so
issued and delivered upon such conversion in accordance with the
terms of the Indenture, will be validly authorized and issued, fully
paid and nonassessable;
(iv) the execution and delivery of this Agreement have been
duly authorized by all necessary corporate action of the Company,
and this Agreement has been duly executed and delivered by the
Company;
(v) the Company is a corporation validly existing and in good
standing under the laws of the State of Delaware (which opinion may
be based solely on a certificate of the Secretary of State of such
state), and has full corporate power and authority to own or lease,
as the case may be, and to operate its properties and to conduct its
business as described in the Prospectus. The Company is duly
registered and qualified to conduct its business and is in good
standing in each United States jurisdiction or place where, based on
a certificate of an officer of the Company, the nature of its
properties or the conduct of its business requires such registration
or qualification, except where the failure so to register or qualify
or to be in good standing would not have a Material Adverse Effect;
(vi) the Notes and Common Stock conform to the respective
descriptions thereof contained in the Prospectus; and the holders of
outstanding shares of capital stock of the Company are not entitled
to preemptive or other rights to subscribe for the Notes or Common
Stock;
(vii) the Registration Statement and the Rule 462(b)
Registration Statement, if any, were declared effective under the
Act as of the date and time specified in such opinion, the
Prospectus was filed with the Commission pursuant to the
subparagraph of Rule 424(b) specified in such opinion on the date
specified therein within the period required by such Rule and no
stop order suspending the effectiveness of the Registration
Statement or the Rule 462(b) Registration Statement, if any, has
been issued and, to the knowledge of such counsel, no proceeding for
that purpose is pending or threatened by the Commission;
11
(viii) the Registration Statement and the Prospectus and any
further amendments and supplements thereto made by the Company prior
to the date of such opinion (other than the financial statements and
related schedules therein, as to which such counsel need express no
opinion) comply as to form in all material respects with the
requirements of the Act and the rules and regulations thereunder;
(ix) the statements contained (i) in the Prospectus under the
captions "Description of Notes," "Description of Common Stock" and
"Material Federal Income Tax Consequences" and (ii) in the
Registration Statement in Items 13 and 14, in each case insofar as
they are descriptions of contracts, agreements or other legal
documents, or refer to statements of law or legal conclusions, are
accurate in all material respects and present fairly the information
purported to be described therein;
(x) none of the issuance, offer or sale of the Notes, issuance
of the Conversion Shares or the execution, delivery or performance
by the Company of this Agreement or the Indenture or compliance with
the provisions hereof or thereof (i) will conflict with, result in a
breach of, or constitute a default under, the Organizational
Documents of the Company, (ii) will conflict with, result in a
breach of, or constitute a default under the terms of any indenture,
lease, mortgage, deed of trust, note agreement, loan agreement or
other agreement or instrument included as an exhibit to the
Registration Statement or (iii) will contravene any law, rule or
regulation of the United States or the State of New York or the
General Corporation Law of the State of Delaware or, to such
counsel's knowledge, any order or decree of any court or government
agency or instrumentality or will result in the creation or
imposition of any lien upon any property or assets of the Company
pursuant to the terms of any such agreement or instrument;
(xi) the Company is not, and after giving effect to the
offering and sale of the Notes will not be, an "investment company"
within the meaning of the Investment Company Act;
(xii) to the knowledge of such counsel, there is no action,
suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company or any of
its Significant Subsidiaries or its or their property of a character
required to be disclosed in the Registration Statement which is not
adequately disclosed in the Prospectus, and there is no franchise,
contract or other document of a character required to be described
in the Registration Statement or Prospectus, or to be filed as an
exhibit thereto, which is not described or filed as required;
(xiii) to the knowledge of such counsel, except as described
in the Prospectus, there are no contracts, agreements or
understandings between the Company or any of its Significant
Subsidiaries and any person granting such person the right to
require the Company or any of its Significant Subsidiaries to (1)
file a registration statement under the Act with respect to any
securities of the
12
Company owned or to be owned by such person or (2) include any
securities of the Company owned or to be owned by such person in the
securities registered pursuant to the Registration Statement or (3)
include any securities of the Company owned or to be owned by such
person in any securities being registered pursuant to any other
registration statement filed by the Company or any of its
Significant Subsidiaries under the Act.
In addition, such counsel shall also state that such counsel has
participated in conferences with officers of the Company and with the
independent public accountants for the Company, concerning the preparation of
the Registration Statement and the Prospectus, and, although such counsel has
made certain inquiries and investigations in connection with the preparation of
the Registration Statement and the Prospectus, it is not passing upon and does
not assume any responsibility for the accuracy or completeness of the statements
contained in the Registration Statement and the Prospectus, and has not made any
independent check or verification thereof, except insofar as such statements
relate to such counsel and to clause (ix) above, and on the basis of the
foregoing such counsel's work in connection with this matter did not disclose
any information that gave such counsel reason to believe that on the Effective
Date or at the Execution Time the Registration Statement contains or contained
any untrue statement of a material fact or omitted or omits to state any
material fact or necessary to make the statements therein not misleading or that
the Prospectus, as of its date and on the Closing Date includes any untrue
statement of a material fact or omitted or omits to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading (it being understood that such
counsel need express no belief or opinion with respect to the financial
statements and other financial data included therein).
The opinion of such counsel may be limited to 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.
The opinion with respect to clause (v) and subclause (iii) of clause (x)
may be furnished by Xxxx X. Xxxxxx, Senior Vice President and General Counsel
for the Company, in lieu of Cravath, Swaine & Xxxxx.
(c) The Representatives shall have received from Xxxxxxx Xxxxxxx &
Xxxxxxxx, counsel for the Underwriters, such opinion or opinions and such
negative assurance letter, dated the Closing Date and addressed to the
Representatives, with respect to the issuance and sale of the Notes, the
Conversion Shares, the Registration Statement, the Prospectus (together
with any supplement thereto), the Indenture and other related matters as
the Representatives may reasonably require; and the Company shall have
furnished to such counsel such documents as they reasonably request for
the purpose of enabling them to pass upon such matters.
(d) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board or the
President or an Executive Vice President and the principal financial or
accounting officer of the Company, dated the Closing Date, to the effect
that the signers of such certificate have carefully examined the
Registration Statement, the Prospectus, any supplements to the Prospectus
and this Agreement and that:
13
(i) the representations and warranties of the Company in this
Agreement are 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
complied with all the agreements and satisfied all the conditions on
its part to be performed or satisfied at or prior to the Closing
Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement or the Rule 462(b) Registration Statement, if
any, or the use of the Prospectus has been issued and no proceedings
for that purpose have been instituted or, to the Company's
knowledge, threatened; and
(iii) since the date of the most recent financial statements
included in the Prospectus (exclusive of any supplement thereto),
there has been no Material Adverse Effect, whether or not arising
from transactions in the ordinary course of business, except as set
forth in or contemplated in the Prospectus (exclusive of any
supplement thereto).
(e) At the Execution Time and at the Closing Date,
PricewaterhouseCoopers LLP shall have furnished to the Representatives
letters, dated respectively as of the Execution Time and as of the Closing
Date, in form and substance reasonably satisfactory to the
Representatives, confirming that they are independent accountants within
the meaning of the Act and the Exchange Act and the respective applicable
published rules and regulations thereunder and stating in effect that:
(i) in their opinion the audited financial statements and
financial statement schedules included 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
Act and the Exchange Act and the related published rules and
regulations adopted by the Commission;
(ii) on the basis of a reading of the latest unaudited
financial data made available by the Company and its subsidiaries;
carrying out certain specified 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, directors and committees of the
Company; and inquiries of certain officials of the Company who have
responsibility for financial and accounting matters of the Company
and its subsidiaries as to transactions and events subsequent to
September 30, 2001, nothing came to their attention which caused
them to believe that:
(A) (1) any unaudited condensed, consolidated and
combined financial statements included in the Registration Statement
and the Prospectus do not comply as to form in all material respects
with applicable accounting requirements of the Act and with the
related rules and regulations adopted by the Commission with respect
to registration statements on Form S-3; and such unaudited
condensed, consolidated and combined financial statements are not in
conformity with generally accepted
14
accounting principles applied on a basis substantially
consistent with that of the audited financial statements
included in the Registration Statement and the Prospectus;
(2) (i) at May 31, 2002, there was any changes in the
capital stock of the Company, any increase in long-term debt
of the Company and its subsidiaries, or any decreases in total
current assets or total stockholders' equity as compared with
the amounts shown on the unaudited March 31, 2002, condensed
consolidated balance sheet included in the Registration
Statement and the Prospectus, or (ii) for the period from
April 1, 2002 to May 31, 2002 there were any decreases, as
compared with the corresponding period in the preceding year,
in consolidated net revenues or increases, as compared with
the corresponding period in the preceding year, in the loss
before provision for taxes, except in all instances for
changes or decreases set forth in such letter, in which case
the letter shall be accompanied by an explanation by the
Company as to the significance thereof unless said explanation
is not deemed necessary by the Representatives;
(3) based on a reading of the minutes of the meetings of
the stockholders, directors and committees of the Company and
its subsidiaries 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 September 30, 2001, (i) at a specified date not
more than five business days prior to the date of the letter,
there was any changes in the capital stock of the Company, any
increase in long-term debt of the Company and its
subsidiaries, or any decreases in total current assets or
total stockholders' equity as compared with the amounts shown
on the unaudited March 31, 2002, condensed, consolidated
balance sheet included in the Registration Statement and the
Prospectus, or (ii) for the period from April 1, 2002 to such
specified date there were any decreases, as compared with the
corresponding period in the preceding year, in consolidated
net revenues or increases, as compared with the corresponding
period in the preceding year, in the loss before provision for
taxes, except in all instances for changes or decreases set
forth in such letter, in which case the letter shall be
accompanied by an explanation by the Company as to the
significance thereof unless said explanation is not deemed
necessary by the Representatives; or
(B) the unaudited condensed consolidated and combined
financial statements included in the Registration Statement
and Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the
Act and the related rules and regulations adopted by the
Commission; and
15
(iii) they have performed certain other specified procedures
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 and its subsidiaries) set
forth in the Registration Statement and the Prospectus, including
the information set forth under the captions "Summary," "Risk
Factors," "Capitalization," "Selected Financial Information,"
"Management's Discussion and Analysis of Financial Condition and
Results of Operations," "Business," "Arrangements Between Lucent and
Our Company" and "Certain Indebtedness" in the Prospectus and the
information set forth under the caption "Executive Compensation" in
the Annual Report on Form 10-K for the year ended September 30, 2001
(which incorporates by reference information contained in the Proxy
Report for the Company's 2002 annual meeting) incorporated by
reference into the Registration Statement, agrees with the
accounting records of the Company and its subsidiaries, excluding
any questions of legal interpretation.
References to the Prospectus in this paragraph (h) include any supplement
thereto to the date of the letter.
(f) The NASD shall not have raised any objection with respect to the
fairness and reasonableness of the underwriting terms and arrangements.
(g) At the Execution Time, the Company shall have furnished to the
Representatives a letter substantially in the form of Exhibit A hereto
from each executive officer of the Company addressed to the
Representatives relating to sales and certain other dispositions of shares
of common stock of the Company or certain other securities, and such
letter agreements shall be in full force and effect on the Closing Date.
(h) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Prospectus (exclusive of any supplement
thereto), there shall not have been (i) any change or decrease specified
in the letter or letters referred to in paragraph (E) of this Section 6
other than those decreases of which the Representatives are aware of as of
the Execution Time or (ii) any change, or any development involving a
prospective change, in or affecting the condition (financial or
otherwise), earnings, business, properties or results of operations of the
Company and its Significant Subsidiaries taken as a whole, whether or not
arising from transactions in the ordinary course of business, except as
set forth in or contemplated in the Prospectus (exclusive of any
supplement thereto) the effect of which, in any case referred to in clause
(i) or (ii) above, is, in the judgment of the Representatives, so material
and adverse as to make it impractical or inadvisable to proceed with the
offering or delivery of the Notes or in the judgment of the Company, so
material and adverse as to make it impractical or inadvisable to proceed
with the offering or delivery of the Notes as contemplated by the
Registration Statement (in either case, exclusive of any amendment
thereof) and the Prospectus (in either case, exclusive of any supplement
thereto).
16
(i) Subsequent to the Execution Time, there shall not have been any
decrease in the rating of any of the Company's debt securities by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Act) or any notice given of any intended
or potential decrease in any such rating or of a possible change in any
such rating that does not indicate the direction of the possible change.
(j) Prior to the Closing Date, the Company shall have furnished to
the Representatives such further information, certificates and documents
as the Representatives may reasonably request.
If any of the conditions specified in paragraphs (a) through (j) in
this Section 6 shall not have been fulfilled when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be reasonably satisfactory in form and
substance to the Representatives and counsel for the Underwriters, this
Agreement and all obligations of the Underwriters hereunder may be canceled at,
or at any time prior to, the Closing Date by the Representatives. Notice of
cancellation shall be given to all parties to this Agreement in writing or by
telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall be
delivered at the office of Xxxxxxx Xxxxxxx & Xxxxxxxx, counsel for the
Underwriters, at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, on the Closing
Date.
7. Expenses.
(a) The Company will pay all expenses incident to the performance by
it of its obligations under this Agreement, including (i) the preparation,
printing and filing of the Registration Statement (including financial
statements and exhibits) as originally filed and of each amendment thereto, (ii)
the preparation, issuance and delivery of the certificates for the Notes to the
Underwriters, (iii) the fees and disbursements of the Company's counsel,
accountants and other advisors, (iv) the qualification of the Notes under state
securities laws in accordance with the provisions of Section 5(e) hereof,
including filing fees and the reasonable fees and disbursements of counsel, not
to exceed $5,000, for the Underwriters in connection therewith and in connection
with the preparation of any related blue sky survey and any supplement thereto,
(v) the printing and delivery to the Representatives of copies of each
Preliminary Prospectus, the Prospectus and any amendments or supplements
thereto, (vi) the fees and expenses of any transfer agent or registrar for the
Notes and the Shares, (vii) the filing fees incident to, and the reasonable fees
and disbursements of counsel, not to exceed $10,000, to the Underwriters in
connection with, securing any required review by the NASD of the Registration
Statement and the offering of the Notes in accordance with the provisions of
Section 5(e) hereof and (viii) all out-of-pocket expenses of the Independent
Underwriter, including the reasonable fees and disbursements of counsel for the
Independent Underwriter.
(b) If the sale of the Notes provided for herein is not consummated
because any condition to the obligations of the Underwriters set forth in
Section 6 hereof is not satisfied, because of any termination pursuant to
Section 10 hereof or because of any refusal, inability or failure on the part of
the Company to perform any agreement herein or comply with any provision hereof
other than by reason of a default by the Underwriters, the Company will
17
reimburse the Underwriters through X.X. Xxxxxx Securities Inc. upon demand for
all reasonable out-of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been incurred by the Underwriters in
connection with the proposed purchase and sale of the Notes.
8. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each
Underwriter, the directors, officers, employees and agents of each Underwriter
and each person who controls any Underwriter within the meaning of either the
Act or the Exchange Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become subject
under the Act, the Exchange Act or other Federal or state statutory law or
regulation, at common law or otherwise (collectively, "Losses"), insofar as such
Losses (or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement as originally filed or in any amendment thereof, or in
any Preliminary Prospectus or the Prospectus, or in any amendment thereof or
supplement thereto (each such document, a "Registration Document"), or arise out
of or are based upon the omission or alleged omission to state in any
Registration Document a material fact required to be stated therein or necessary
to make the statements therein not misleading, and agrees to reimburse each such
indemnified party, as incurred, for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the (i) Company will
not be liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon
and in conformity with written information relating to any Underwriter furnished
to the Company by or on behalf of such Underwriter through the Representatives
specifically for inclusion therein and (ii) with respect to any untrue statement
or omission of material fact made in any Preliminary Prospectus, the indemnity
agreement contained in this Section 8(a) shall not inure to the benefit of any
Underwriter from whom the person asserting any such loss, claim, damage or
liability purchased the securities concerned, to the extent that any such loss,
claim, damage or liability of such Underwriter occurs under the circumstance
where it shall be determined by a court of competent jurisdiction by final and
non-appealable judgment that (w) the Company had previously furnished copies of
the Prospectus relating to the Notes to the Representatives (x) delivery of the
Prospectus relating to the Notes was required by the Act to be made to such
person, (y) the untrue statement or alleged untrue statement or omission or
alleged omission of a material fact contained in the Preliminary Prospectus was
corrected in the Prospectus relating to the Notes and (z) there was not sent or
given to such person, at or prior to the written confirmation of the sale of
such securities to such person, a copy of the Prospectus relating to the Notes.
This indemnity agreement will be in addition to any liability which the Company
may otherwise have.
In addition to the foregoing indemnification of all of the
Underwriters, including the Independent Underwriter, the Company agrees to
indemnify and hold harmless the Independent Underwriter and each person who
controls the Independent Underwriter within the meaning of the Act or the
Exchange Act, from and against any losses, claims, damages, liabilities, joint
or several, or expenses to which the Independent Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or
18
actions in respect thereof) arise out of or are based upon the Independent
Underwriter's acting (or alleged failing to act) as such "qualified independent
underwriter" and agrees to reimburse the Independent Underwriter for any legal
or other expenses reasonably incurred by the Independent Underwriter in
connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred. This indemnity agreement will
be in addition to any liability which the Company may otherwise have.
(b) Each Underwriter severally and not jointly agrees to indemnify and
hold harmless the Company, each of its directors, each of its officers who signs
the Registration Statement, and each person who controls the Company within the
meaning of either the Act or the Exchange Act, to the same extent as the
foregoing indemnity to each Underwriter, but only with reference to written
information relating to such Underwriter furnished to the Company by or on
behalf of such Underwriter through the Representatives specifically for
inclusion in the documents referred to in the foregoing indemnities. This
indemnity agreement will be in addition to any liability which any Underwriter
may otherwise have. The Representatives confirm and the Company acknowledges
that the statements set forth in the last paragraph of the cover page regarding
delivery of the Notes and, under the heading "Underwriting," (i) the list of
Underwriters and their respective participation in the sale of the Notes, (ii)
the sentences in the third paragraph related to concessions and reallowances and
(iii) the seventh paragraph related to stabilization, syndicate covering
transactions and penalty bids, in any Preliminary Prospectus and the Prospectus
constitute the only information furnished in writing by or on behalf of the
several Underwriters for inclusion in any Preliminary Prospectus or the
Prospectus.
In addition, each Underwriter agrees to indemnify and hold harmless
the Independent Underwriter to the same extent as the indemnity from the
Underwriters to the Company as is set forth in the preceding subsection.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be entitled
to appoint counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably
19
concluded that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those available to
the indemnifying party, (iii) the indemnifying party shall not have employed
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of the institution of
such action or (iv) the indemnifying party shall authorize the indemnified party
to employ separate counsel at the expense of the indemnifying party. An
indemnifying party will not, without the prior written consent of the
indemnified parties, which shall not be unreasonably withheld, settle or
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding. The indemnifying party or parties shall not be liable under
this Agreement with respect to any settlement made by any indemnified party or
parties without prior written consent, which consent shall not be unreasonably
withheld, by the indemnifying party or parties to such settlement.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Underwriters severally
agree to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending same) (collectively "Losses") to which the Company
and one or more of the Underwriters may be subject in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and by the Underwriters from the offering of the Notes on the other hand;
provided, however, that in no case shall any Underwriter (except as may be
provided in any agreement among underwriters relating to the offering of the
Notes) be responsible for any amount in excess of the underwriting discount or
commission applicable to the Notes purchased by such Underwriter hereunder;
provided, further, that in no case shall the Independent Underwriter, in its
capacity as "qualified independent underwriter," be responsible for any amount
in excess of the compensation received by the Independent Underwriter for acting
in such capacity. If the allocation provided by the immediately preceding
sentence is unavailable for any reason, the Company and the Underwriters shall
contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company on the one hand and
of the Underwriters on the other in connection with the statements or omissions
which resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Company shall be deemed to be equal to
the total net proceeds from the offering (before deducting expenses) received by
it, and benefits received by the Underwriters shall be deemed to be equal to the
total underwriting discounts and commissions, in each case as set forth on the
cover page of the Prospectus. Benefits received by the Independent Underwriter
in its capacity as "qualified independent underwriter" shall be deemed to be
equal to the compensation received by the Independent Underwriter for acting in
such capacity. Relative fault shall be determined by reference to, among other
things, whether any untrue or any alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to information
provided by the Company on the one hand or the Underwriters on the other, the
intent of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. The Company
and the Underwriters agree that it would not be just and equitable if
contribution were
20
determined by pro rata allocation or any other method of allocation which does
not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), 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. For purposes of this Section 8, each person who
controls an Underwriter within the meaning of either the Act or the Exchange Act
and each director, officer, employee and agent of an Underwriter shall have the
same rights to contribution as such Underwriter, and each person who controls
the Company within the meaning of either the Act or 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 the applicable terms and conditions of this
paragraph (d).
9. Default by an Underwriter. If any one or more Underwriters shall
fail to purchase and pay for any of the Notes agreed to be purchased by such
Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Notes set forth
opposite their names in Schedule I hereto bears to the aggregate amount of Notes
set forth opposite the names of all the remaining Underwriters) the Notes which
the defaulting Underwriter or Underwriters agreed but failed to purchase;
provided, however, that in the event that the aggregate amount of Notes which
the defaulting Underwriter or Underwriters agreed but failed to purchase shall
exceed 10% of the aggregate amount of Notes set forth in Schedule I hereto, the
remaining Underwriters shall have the right to purchase all, but shall not be
under any obligation to purchase any, of the Notes and if such nondefaulting
Underwriters do not purchase all the Notes, this Agreement will terminate
without liability to any nondefaulting Underwriter or the Company. In the event
of a default by any Underwriter as set forth in this Section 9, the Closing Date
shall be postponed for such period, not exceeding five Business Days, as the
Representatives shall determine in order that the required changes in the
Registration Statement or the Prospectus or in any other documents or
arrangements may be effected. Nothing contained in this Agreement shall relieve
any defaulting Underwriter of its liability, if any, to the Company and any
nondefaulting Underwriter for damages occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to termination in
the absolute discretion of the Representatives by notice given to the Company
prior to delivery of and payment for the Notes if at any time prior to such time
(i) trading in any securities issued or guaranteed by the Company shall have
been suspended by the Commission or trading in securities generally on the New
York Stock Exchange or the Nasdaq National Market System shall have been
suspended or limited or minimum prices shall have been established on such
Exchange or National Market, (ii) a banking moratorium shall have been declared
by either Federal or New York State authorities or (iii) there shall have
occurred any outbreak or escalation of hostilities, declaration by the United
States of a national emergency or war or other calamity or crisis, the effect of
which on financial markets of the United States is such as to make it, in the
sole judgment of the Representatives, impractical or inadvisable to proceed with
the offering or delivery of the Notes as contemplated by the Prospectus
(exclusive of any supplement thereto).
21
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company, or their respective officers, if applicable, and of the Underwriters
set forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter,
the Company, or any of the officers, directors or controlling persons referred
to in Section 8 hereof, and will survive delivery of and payment for the Notes.
The provisions of Sections 7, 8 and 13 hereof shall survive the termination or
cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing and
effective only on receipt, and, (a) if sent to X.X. Xxxxxx Securities Inc., will
be mailed, delivered or telefaxed to the Syndicate Desk (fax no.: (212)
000-0000), care of X.X. Xxxxxx Securities Inc., at 000 Xxxx Xxxxxx, 0xx xxxxx,
Xxx Xxxx, XX 00000; (b) if sent to Xxxxxxx Xxxxx Xxxxxx, will be mailed,
delivered or telefaxed to the Xxxxxxx Xxxxx Xxxxxx General Counsel (fax no.:
(000) 000-0000) and the General Counsel, care of Xxxxxxx Xxxxx Xxxxxx, at 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, attention: General Counsel; and (c)
if sent to the Company, will be mailed, delivered or telefaxed to Xxxx X.
Xxxxxx, Senior Vice President and General Counsel (fax no.: (000) 000-0000),
Agere Systems Inc., 000 Xxxxx Xxxxxxxxx, Xxxxxxxxx, Xxxxxxxxxxxx 00000, with a
copy to Xxxxxxx X. Xxxxxx, III (fax no.: (000) 000-0000), Cravath, Swaine &
Xxxxx, 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000. Notwithstanding the
foregoing, notices to a party shall be directed to such other address for such
party as shall be specified by such party in a like notice given pursuant to
this Section 12.
13. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and (to the
extent expressly provided in Section 8) the officers and directors and
controlling persons referred to in Section 8 hereof, and no other person will
have any right or obligation hereunder.
14. Applicable Law. This agreement will be governed by, and
construed in accordance with, the laws of the State of New York.
15. Counterparts. This Agreement may be executed by any one or more
of the parties in any number of counterparts, each of which shall be deemed to
be an original, but all such counterparts shall together constitute one and the
same agreement.
16. Headings. The section headings used herein are for convenience
only and shall not affect the construction hereof.
17. Definitions. The terms which follow, when used in this
Agreement, shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder.
"Business Day" shall mean any day other than a Saturday, a Sunday or
a legal holiday or a day on which banking institutions or trust companies
are authorized or obligated by law to close in New York City.
"Commission" shall mean the Securities and Exchange Commission.
22
"Effective Date" shall mean each date and time that the Registration
Statement, any post-effective amendment or amendments thereto and any Rule
462(b) Registration Statement became or become effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
"Investment Company Act" shall mean the Investment Company Act of
1940, as amended, and the rules and regulations of the Commission
promulgated thereunder.
"X.X. Xxxxxx" shall mean X.X. Xxxxxx Securities Inc.
"Organizational Documents" shall mean, in respect of any company,
corporation, trust, partnership, limited liability company, governmental
agency or other enterprise, as applicable, its founding act, charter,
articles of incorporation and by-laws, deed of trust, memorandum and
articles of association, statute, certificate of partnership, partnership
agreement, limited liability company agreement, or similar instrument.
"Preliminary Prospectus" shall mean any preliminary prospectus
referred to in Section 1(a) and any preliminary prospectus included in the
Registration Statement at the Company Effective Date that omits Rule 430A
Information.
"Prospectus" shall mean the prospectus relating to the Notes and
that is first filed pursuant to Rule 424(b) after the Execution Time, or
if no filing pursuant to Rule 424(b) is required, shall mean the form of
final prospectus relating to the Notes that is used in connection with
such offering and sale and that is included in the Registration Statement
at the Effective Date.
"Registration Statement" shall mean the registration statement
referred to in Section 1(a) above including incorporated documents,
exhibits and financial statements, as amended at the Execution Time (or,
if not effective at the Execution Time, in the form in which it shall
become effective) and, in the event any post-effective amendment thereto
or any Rule 462(b) Registration Statement becomes effective prior to the
Closing Date, shall also mean such registration statement as so amended or
such Rule 462(b) Registration Statement, as the case may be. Such term
shall include any Rule 430A Information deemed to be included therein at
the Effective Date as provided by Rule 430A.
"Rule 424," "Rule 430A," "Rule 462(b)," "Regulation S-K" and
"Regulation S-X" refer to such rules and regulations under the Act.
"Rule 430A Information" shall mean information with respect to the
Notes and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
23
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b)
relating to the offering covered by the initial registration statement
referred to in Section 1(a) above.
"Xxxxxxx Xxxxx Xxxxxx" shall mean Xxxxxxx Xxxxx Xxxxxx Inc.
24
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company and the several Underwriters.
Very truly yours,
AGERE SYSTEMS INC.
By:____________________________
Name:
Title:
25
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
X.X. Xxxxxx Securities Inc.
By: __________________________________
Name:
Title:
Xxxxxxx Xxxxx Xxxxxx Inc.
By: __________________________________
Name:
Title:
For themselves and the other several
Underwriters, if any, named in
Schedule I to the foregoing
Agreement
26
SCHEDULE I
PRINCIPAL AMOUNT OF
NOTES
UNDERWRITERS TO BE PURCHASED
------------ ---------------
X.X. Xxxxxx Securities Inc. .............. $
Xxxxxxx Xxxxx Xxxxxx Inc. ................ $
----------
Total............................. $
I-1
SCHEDULE II
Agere Systems Deutschland GMBH & Xx.XX
Agere Systems Singapore Pte. Ltd.
II-1
Exhibit A
[FORM OF LOCK-UP AGREEMENT]
Agere Systems Inc.
, 2002
X.X. Xxxxxx Securities Inc.
Xxxxxxx Xxxxx Xxxxxx Inc.
As Representatives of the several Underwriters,
c/o X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 and
Salmon Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This letter is being delivered to you in connection with the
proposed Underwriting Agreement (the "Underwriting Agreement"), among Agere
Systems Inc. (the "Company") and each of you as representatives of a group of
Underwriters named therein, relating to an underwritten public offering of
$ aggregate principal amount of % Convertible Subordinated Notes due
2009.
In order to induce you and the other Underwriters to enter into the
Underwriting Agreement, the undersigned will not, without the prior written
consent of the Representatives on behalf of the Underwriters for a period of 60
days after the date of execution of the Underwriting Agreement: (i) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase or otherwise transfer or dispose of, directly or indirectly, or
announce the offering of any shares of any class of common stock of the Company
or any securities convertible into or exercisable or exchangeable for shares of
any class of common stock of the Company (whether such shares or any such
securities are now owned or hereafter acquired) or (ii) enter into any swap or
other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of shares of any class of the common stock of
the Company, whether any such transaction described in clause (i) or (ii) above
is to be settled by delivery of shares of any class of common stock of the
Company or such other securities, in cash or otherwise.
The above provisions shall be subject to the Underwriting Agreement
being entered into on or before , 2002. If for any reason the Underwriting
Agreement shall be terminated prior to the Closing Date (as defined in the
Underwriting Agreement), the agreement set forth above shall likewise be
terminated.
A-1
Notwithstanding the foregoing, the undersigned may transfer common
stock of the Company (i) as a bona fide gift or gifts, provided that the donee
or donees thereof agree to be bound by the restrictions set forth herein and the
disposition is approved by the Representatives on behalf of the Underwriters,
which approval is not to be unreasonably withheld (ii) in connection with the
settlement of any restricted stock or restricted stock unit awards, pursuant to
which the Company may withhold shares to pay applicable withholding taxes, or
(iii) with the prior written consent of the Representatives on behalf of the
Underwriters.
Yours very truly,
[SIGNATURE OF EXECUTIVE OFFICER]
[Name and address of executive
officer]
A-2
