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Exhibit 1
QUANTUM CORPORATION
$250,000,000
7% Convertible Subordinated Notes Due 2004
Underwriting Agreement
New York, New York
July 29, 1997
Salomon Brothers Inc
Seven Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Quantum Corporation, a Delaware corporation (the "Company"),
proposes to issue and sell to Salomon Brothers Inc (the "Underwriter")
$250,000,000 principal amount of its 7% Convertible Subordinated Notes due
2004 (the "Firm Securities"). The Company also proposes to grant to you an
option to purchase up to $37,500,000 additional principal amount of such
Securities to cover over-allotments, if any (the "Option Securities" and,
together with the Firm Securities, the "Securities"). The Securities are
convertible into shares of Common Stock, $0.01 par value, of the Company
("Common Stock"). The Securities are to be issued under an indenture (the
"Indenture") dated as of August 1, 1997 as supplemented by a supplemental
indenture (the "Supplemental Indenture") dated as of August 1, 1997, between the
Company and LaSalle National Bank, as trustee (the "Trustee").
1. Representations and Warranties. The Company
represents and warrants to the Underwriter as set forth below in this Section 1.
Certain terms used in this Section 1 are defined in paragraph (w) hereof.
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(a) If the offering of the Securities is a Delayed Offering
(as specified in Schedule I hereto), paragraph (i) below is applicable and, if
the offering of the Securities is a Non-Delayed Offering (as so specified),
paragraph (ii) below is applicable.
(i) The Company meets the requirements for the use
of Form S-3 under the Securities Act of 1933 (the "Act") and has filed
with the Securities and Exchange Commission (the "Commission") a
registration statement (file number 333-29525) on such Form, including
a basic prospectus, for registration under the Act of the offering and
sale of the Securities. The Company may have filed one or more
amendments thereto, and may have used a Preliminary Final Prospectus,
each of which has previously been furnished to you. Such registration
statement, as so amended, has become effective. The offering of the
Securities is a Delayed Offering and, although the Basic Prospectus
may not include all the information with respect to the Securities and
the offering thereof required by the Act and the rules thereunder to
be included in the Final Prospectus, the Basic Prospectus includes all
such information required by the Act and the rules thereunder to be
included therein as of the Effective Date. The Company will next file
with the Commission pursuant to Rules 415 and 424(b)(2) or (5) a final
supplement to the form of prospectus included in such registration
statement relating to the Securities and the offering thereof. As
filed, such final prospectus supplement shall include all required
information with respect to the Securities and the offering thereof
and, except to the extent the Underwriter 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 information and other changes (beyond that contained in the
Basic Prospectus and any Preliminary Prospectus) as the Company has
advised you, prior to the Execution Time, will be included or made
therein.
(ii) The Company meets the requirements for the use of
Form S-3 under the Act and has filed with the Securities and Exchange
Commission (the "Commission") a
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registration statement (file number 333-29525) on such Form, including
a basic prospectus, for the registration under the Act of the offering
and sale of the Securities. The Company may have filed one or more
amendments thereto, including a Preliminary Final Prospectus, each of
which has previously been furnished to you. The Company will next
file with the Commission either (x) a final prospectus supplement
relating to the Securities in accordance with Rules 430A and 424(b)(1)
or (4) or (y) prior to the effectiveness of such registration
statement, an amendment to such registration statement. In the case
of clause (x), 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 the Final Prospectus with respect to the
Securities and the offering thereof. As filed, such final prospectus
supplement or such amendment and form of final prospectus supplement
shall contain all Rule 430A Information, together with all other such
required information, with respect to the Securities and the offering
thereof and, except to the extent the Underwriter 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 information and other changes (beyond that contained in the
Basic Prospectus and any Preliminary Final 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 Final Prospectus is first filed (if required) in accordance
with Rule 424(b) and on the Closing Date, the Final Prospectus (and any
supplements thereto) will, comply in all material respects with the
applicable requirements of the Act, the Securities Exchange Act of 1934
(the "Exchange Act"), and the Trust Indenture Act of 1939 (the "Trust
Indenture Act") and the respective rules thereunder; on the Effective Date,
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; on the Effective Date
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and on the Closing Date, the Indenture and the Supplemental Indenture did
or will comply in all material respects with the requirements of the Trust
Indenture Act and the rules thereunder; and, on the Effective Date, the
Final 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 Final 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 (i) that part of the Registration Statement which shall constitute
the Statement of Eligibility (Form T-1) under the Trust Indenture Act of
the Trustee or (ii) the information contained in or omitted from the Final
Prospectus in reliance upon and in conformity with information furnished in
writing to the Company by or on behalf of the Underwriter specifically for
inclusion in the Final Prospectus (or any supplement or amendment thereto).
(c) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property
and to conduct its business as described in the Final 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.
(d) Each subsidiary of the Company has been duly incorporated, is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority to
own its property and to conduct its business as described in the Final
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
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would not have a material adverse effect on the Company and its subsidiaries,
taken as a whole. Other than Quantum Peripherals (Europe) S.A. (a "Material
Subsidiary"), no subsidiary of the Company is a "significant subsidiary" as such
term is defined Regulation S-X under the Act.
(e) The Company has a good and marketable title to all the properties
and assets owned by it or reflected as owned by it in the Final Prospectus
which are material to the business of the Company subject to no lien,
mortgage, pledge, charge or encumbrance of any kind except (i) those, if
any, reflected in the Final Prospectus, or (ii) those which are not
material in amount or do not adversely affect the use made and proposed to
be made of such property by the Company. The Company holds its leased
properties under valid and binding leases, with such exceptions as are not
material in relation to the business of the Company. Except as disclosed
in the Final Prospectus, the Company owns or leases all such properties as
are necessary to its operations as now conducted, or as proposed to be
conducted, in each case as discussed in or contemplated by the Final
Prospectus.
(f) The Company's authorized equity capitalization is as set forth in
the Final Prospectus. The capital stock of the Company conforms to the
description thereof contained in the Final Prospectus.
(g) The shares of Common Stock outstanding immediately prior to the
issuance of the Securities to be sold by the Company have been duly
authorized and are validly issued, fully paid and nonassessable.
(h) This Agreement has been duly authorized, executed and delivered
by the Company.
(i) The Securities have been duly and validly authorized and, when
executed, authenticated and delivered to and paid for by the Underwriter
in accordance with the terms of this Agreement, will (i) be validly issued,
fully paid and non-assessable and will not be subject to any preemptive or
similar rights, (ii) be valid and binding obligations of the Company
enforceable in accordance with
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their terms, except as (A) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (B) rights of acceleration, if applicable, and the
availability of equitable remedies may be limited by equitable principles
of general applicability and (iii) be entitled to the benefits of the
Indenture and the Supplemental Indenture pursuant to which such securities
are to be issued. Upon delivery of the Securities pursuant to this
Agreement and payment therefor as contemplated herein, the Underwriter
will acquire good and marketable title to the Securities, free and clear of
any liens, claims, encumbrances, and security interests or other
defect in title created by the Company.
(j) The Common Stock reserved for issuance upon conversion of the
Securities have been duly authorized and reserved and, when executed and
issued upon conversion of such Securities in accordance with the terms of
such Securities, will be duly and validly issued, fully paid and
non-assessable. The holders of outstanding shares of capital stock of the
Company are not entitled to any preemptive rights or similar rights to
subscribe for the Securities or the shares of Common Stock issuable upon
conversion thereof.
(k) The Indenture and the Supplemental Indenture pursuant to which
the Securities are to be issued have been duly authorized,and when executed
and delivered by the Company, will be valid and binding agreements of the
Company, enforceable in accordance with their respective terms except as
(i) the enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (ii) rights of
acceleration, if applicable, and the availability of equitable remedies may
be limited by equitable principles of general applicability.
(l) The execution and delivery by the Company of, and the performance
by the Company of its obligations under, this Agreement, the Indenture, the
Supplemental Indenture and the Securities will not contravene any provision
of applicable law or the certificate of incorporation or bylaws of the
Company or, except as set forth in the Final Prospectus, any agreement or
other instrument binding upon the Company or any of its subsidiaries that
is material to
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the Company and its subsidiaries, taken as a whole, or any judgment, order
decree of any governmental body, agency or court having jurisdiction over
the Company or any subsidiary, and no consent, approval, 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, the Indenture, the Supplemental Indenture or the Securities,
except 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 Securities and
except as may be required under federal securities laws with respect to the
Company's obligations under the Underwriting Agreement.
(m) Except as expressly identified in the Final Prospectus there has
not occurred 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 Basic
Prospectus.
(n) The consolidated financial statements of the Company and its
consolidated subsidiaries, together with related schedules and notes,
included in the Registration Statement and the Final Prospectus present
fairly the consolidated financial position and the consolidated results of
operations and cash flows of the Company and its consolidated subsidiaries
for the periods or at the dates therein specified; such consolidated and
combined financial statements and related schedules and notes have been
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prepared in conformity with generally accepted accounting principles,
consistently applied throughout the periods involved except as otherwise
noted in such financial statements; and the other financial data concerning
the Company and its subsidiaries set forth in the Registration Statement
and Final Prospectus (and any amendment or supplement thereto) are
accurately presented and were derived from such financial statements and
the books and records of the Company.
(o) Neither the Company nor any of its subsidiaries is (i) in
violation of its articles of incorporation or bylaws, or other
organizational documents, or (ii) in violation in any material respect of
any law, ordinance, administrative or governmental rule or regulation
applicable to the Company or its subsidiaries, or (iii) in violation of any
decree of any court or governmental agency or body having jurisdiction over
the Company or its subsidiaries, or (iv) in default in any material respect
in the performance of any obligation, agreement or condition contained in
any bond, debenture, note or any other evidence of indebtedness or in any
material agreement, indenture, lease or other instrument to which the
Company or its subsidiaries are a party or by which it or any of their
properties may be bound, which, in the case of clauses (ii), (iii), and
(iv), would have a material adverse effect on the Company and its
subsidiaries taken as a whole.
(p) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is a party or to
which any of the properties of the Company or any of its subsidiaries is
subject other than proceedings accurately described in all material
respects in the Final Prospectus and proceedings that would not have a
material adverse effect on the Company and its subsidiaries, taken as a
whole, or on the power or ability of the Company to perform its obligations
under this Agreement, the Indenture, the Supplemental Indenture or the
Securities or to consummate the transactions contemplated by the Final
Prospectus.
(q) Each of the Company and its subsidiaries 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, which are necessary to
own, lease, license and use its properties and
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assets and to conduct its business in the manner described in the Final
Prospectus, except to the extent that the failure to obtain or file would
not have a material adverse effect on the Company and its subsidiaries,
taken as whole.
(r) The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended.
(s) The Company and its subsidiaries (i) are in compliance with any
and all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wasters, pollutants or contaminant
("Environmental Laws"), (ii) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except, in each case,
where such noncompliance with Environmental Laws, failure to receive
required permits, licenses or other approvals or failure to comply with the
terms and conditions of such permits, licenses or other approvals would not
reasonably be expected to, singly or in the aggregate, have a material
adverse effect on the Company and its subsidiaries, taken as a whole.
(t) In the ordinary course of its business, the Company conducts a
periodic review of the effect of Environmental Laws on the business,
operations and properties of the Company and its subsidiaries, in the
course of which it identifies and evaluates associated costs and
liabilities (including, without limitation, any capital or operating
expenditures required clean-up, closure of properties or compliance with
Environmental Laws or any permit, license of approval, any related
constraints on operating activities and any potential liabilities to third
parties). On the basis of such review, the Company has reasonably
concluded that such associated costs and liabilities would not, singly or
in the aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as whole.
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(u) Except as disclosed in the Final Prospectus, the Company and each
of its subsidiaries owns or possesses, or can acquire on reasonable terms,
all patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures) trademarks,
service marks, mask works, approvals, governmental authorizations and trade
names necessary to the conduct of the business as now operated by them,
except such as are not material to the business names, patent rights, masks
works, copyrights, licenses, approvals or governmental authorizations would
not have a material adverse effect on the condition (financial or
otherwise), business, results of operation or prospects of the Company, and
the Company has no knowledge of any material infringement by it of
trademarks, trade name rights, patent rights, mask works, copyrights,
licenses, trade secrets or similar rights of others and, except as
disclosed in the Final Prospectus, neither the Company nor any of its
subsidiaries has received any notice of infringement of or conflict with
asserted rights of others with respect to any of the foregoing which,
singly or in the aggregate, would have a material adverse effect on the
Company and its subsidiaries, taken as a whole.
(v) The Company has complied with all provisions of Section 517.075,
Florida Statutes (Chapter 92-198, Laws of Florida).
(w) The terms which follow, when used in this Agreement, shall have
the meanings indicated. The term "the Effective Date" shall mean each date
that the Registration Statement and any post-effective amendment or
amendments thereto became or become effective. "Execution Time" shall mean
the date and time that this Agreement is executed and delivered by the
parties hereto. "Basic Prospectus" shall mean the prospectus referred to
in paragraph (a) above contained in the Registration Statement at the
Effective Date including, in the case of a Non-Delayed Offering, any
Preliminary Final Prospectus. "Preliminary Final Prospectus" shall mean
any preliminary prospectus supplement to the Basic Prospectus which
describes the Securities and the offering thereof and is used prior to
filing of the Final Prospectus. "Final Prospectus" shall mean the
prospectus supplement relating to the Securities that is
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first filed pursuant to Rule 424(b) after the Execution Time, together with
the Basic Prospectus or, if, in the case of a Non-Delayed Offering, no
filing pursuant to Rule 424(b) is required, shall mean the form of final
prospectus relating to the Securities, including the Basic Prospectus,
included in the Registration Statement at the Effective Date.
"Registration Statement" shall mean the registration statement referred to
in paragraph (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 becomes
effective prior to the Closing Date (as hereinafter defined), shall also
mean such registration statement as so amended. Such term shall include
any Rule 430A Information deemed to be included therein at the Effective
Date as provided by Rule 430A. "Rule 415", "Rule 424", "Rule 430A" and
"Regulation S-K" refer to such rules or regulation under the Act. "Rule
430A Information" means information with respect to the Securities and the
offering thereof permitted to be omitted from the Registration Statement
when it becomes effective pursuant to Rule 430A. Any reference herein to
the Registration Statement, the Basic Prospectus, any Preliminary Final
Prospectus or the Final 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 the Basic Prospectus,
any Preliminary Final Prospectus or the Final Prospectus, as the case may
be; and any reference herein to the terms "amend", "amendment" or
"supplement" with respect to the Registration Statement, the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus shall
be 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 the Basic Prospectus, any Preliminary Final Prospectus or the
Final Prospectus, as the case may be, deemed to be incorporated therein by
reference. A "Non-Delayed Offering" shall mean an offering of securities
which is intended to commence promptly after the effective date of a
registration statement, with the result that, pursuant to Rules 415 and
430A, all information (other than Rule 430A Information) with respect to
the securities so offered must be included in such registration statement
at the effective
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date thereof. A "Delayed Offering" shall mean an offering of securities
pursuant to Rule 415 which does not commence promptly after the effective
date of a registration statement, with the result that only information
required pursuant to Rule 415 need be included in such registration
statement at the effective date thereof with respect to the securities so
offered. Whether the offering of the Securities is a Non-Delayed Offering
or a Delayed Offering shall be set forth in Schedule I hereto.
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 the Underwriter, and the Underwriter agrees to purchase from the
Company, at a purchase price of 97.75% of the principal amount thereof, plus
accrued interest, if any, from August 1, 1997 to the Closing Date, the
principal amount of the Firm Securities set forth opposite the Underwriter's
name in Schedule I hereto. Each Security will be convertible at the option
of the holder into shares of Common Stock at a conversion price of $46.325
("Conversion Price"), which Conversion Price is subject to adjustment in
certain events, as provided in the Indenture
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company hereby grants
an option (the "Option") to the Underwriter to purchase the Option
Securities at a purchase price of 97.75% of the principal amount thereof,
plus accrued interest, if any, from August 1, 1997 to the settlement date
for the Option Securities. The Option may be exercised only to cover
over-allotments in the sale of the Firm Securities by the Underwriter. The
Option may be exercised in whole or in part at any time (but not more than
once) on or before the 30th day after the date of the Final Prospectus upon
written or telegraphic notice by the Underwriter to the Company setting
forth the principal amount of Option Securities as to which the Underwriter
is exercising the Option and the settlement date therefor. Delivery of the
certificates for the Option Securities, and payment therefor, shall be made
as provided in Section 3 hereof.
3. Delivery and Payment. Delivery of and payment for the Firm
Securities and Option Securities (if the option provided for in Section 2(b)
hereof shall have been exercised on or before the third business day prior to
the Closing Date) shall be made at 10:00 AM, New York City time, on August 1,
1997, or such later
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date as the Underwriter shall designate, which date and time may be postponed by
agreement between the Underwriter and the Company or as provided in Section 8
hereof (such date and time of delivery and payment for the Securities being
herein called the "Closing Date"). Delivery of the Securities shall be made to
the Underwriter against payment of the purchase price thereof to or upon the
order of the Company by certified or official bank check or checks drawn on or
by a New York Clearing House bank and payable in same day funds. Delivery of
the Securities shall be made at such location as the Underwriter shall
reasonably designate at least one business day in advance of the Closing Date
and payment for the Securities shall be made at the office of Xxxxxx Xxxxxxx
Xxxxxxxx & Xxxxxx, Palo Alto, California. Certificates for the Securities shall
be registered in such names and in such denominations as the Underwriter may
request not less than three full business days in advance of the Closing Date.
The Company agrees to have the Securities available for inspection,
checking and packaging by the Underwriter in New York, New York, not later
than 1:00 PM on the business day prior to the Closing Date.
If the Option is exercised after the third business day prior to the
Closing Date, the Company will deliver (at the expense of the Company) to the
Underwriter, at Seven World Trade Center, New York, New York, on the date
specified by the Underwriter (which shall be within three business days after
exercise of the Option), certificates for the Option Securities in such names
and denominations as the Underwriter shall have requested against payment of the
purchase price thereof to upon order of the Company by certified or official
bank check or checks drawn on or by a New York Clearing House bank and payable
in same day funds. If settlement for the Option Securities occurs after the
Closing Date, the Company will deliver to the Underwriter on the settlement date
for the Option Securities, and the obligation of the Underwriter to purchase the
Option Securities shall be conditioned upon receipt of, supplemental opinions,
certificates and letters confirming as of such date the opinions, certificates
and letters delivered on the Closing Date pursuant to Section 5 hereof.
4. Agreements. The Company agrees with the Underwriter that:
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(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. Prior to the termination of the offering of
the Securities, the Company will not file any amendment of the Registration
Statement or supplement (including the Final Prospectus or any Preliminary
Final Prospectus) to the Basic Prospectus unless the Company has furnished
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, the Company will cause the Final 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
Underwriter of such timely filing. The Company will promptly advise the
Underwriter (i) when the Registration Statement, if not effective at the
Execution Time, and any amendment thereto, shall have become effective, (ii)
when the Final Prospectus, and any supplement thereto, shall have been filed
with the Commission pursuant to Rule 424(b), (iii) when, prior to
termination of the offering of the Securities, any amendment to the
Registration Statement shall have been filed or become effective, (iv) of
any request by the Commission for any amendment of the Registration
Statement or supplement to the Final Prospectus or for any additional
information, (v) 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 (vi) of
the receipt by the Company of any notification with respect to the
suspension of the qualification of the Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose. The Company will use its best efforts to prevent the issuance of
any such stop order and, if issued, to obtain as soon as possible the
withdrawal thereof.
(b) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of
which the Final 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
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if it shall be necessary to amend the Registration Statement or supplement
the Final Prospectus to comply with the Act or the Exchange Act or the
respective rules thereunder, the Company promptly will prepare and file
with the Commission, subject to the second sentence of paragraph (a) of
this Section 4, an amendment or supplement which will correct such
statement or omission or effect such compliance.
(c) As soon as practicable, the Company will make generally available
to its security holders and to the Underwriter 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 Underwriter and counsel for the
Underwriter, without charge, copies of the Registration Statement
(including exhibits thereto) and, so long as delivery of a prospectus by an
Underwriter or dealer may be required by the Act, as many copies of any
Preliminary Final Prospectus and Final Prospectus and any supplement
thereto as the Underwriter may reasonably request.
(e) The Company will arrange for the qualification of the Securities
for sale under the laws of such U.S. jurisdictions as the Underwriter may
designate, and will maintain such qualifications in effect so long as
required for the distribution of the Securities, except that the Company
shall not be required to execute a general consent to service of process or
take any action that would subject it to taxation of any jurisdiction
where it is not already so subject.
(f) Except for certain exceptions pertaining to employee benefit plans
and outstanding options to purchase Common Stock and the issuance of Common
Stock as consideration in the acquisition of the stock or assets of another
entity (provided that in connection with such acquisitions the number of
shares so issued shall not exceed 5% of the currently outstanding shares of
Common Stock), the Company will not, without the prior written consent of
the Underwriter, for a period of 60 days after the Execution Time, directly
or indirectly, offer to sell, sell, grant any option for the sale of or
otherwise dispose of any shares of Common Stock or any securities
convertible into or exchangeable or exercisable for any shares of Common
Stock, or any right or option to acquire any such shares or securities or
offer, sell or contract to sell, or otherwise dispose of, directly or
indirectly, or announce the offering of, any debt securities issued or
guaranteed by the Company (other than the Securities).
(g) The Company confirms as of the date hereof that it is in compliance
with all provisions of Section 1 of Laws of Florida, Chapter 92-198, An Act
Relating to Disclosure of Doing Business with Cuba, and the Company further
agrees that, so long as it is engaged in the distribution of Securities
pursuant to this Agreement, it commences engaging in business with the
government of Cuba or with any person or affiliate located in Cuba after the
date the
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Registration Statement becomes or has become effective with the Commission
or with the Florida Department of Banking and Finance (the "Department"),
whichever date is later, or if the information reported in the Final
Prospectus, if any, concerning the Company's business with Cuba or with any
person or affiliate located in Cuba changes in any material way, the
Company will provide the Department notice of such business or change, as
appropriate, in a form acceptable to the Department.
5. Conditions to the Obligations of the Underwriter. The obligations
of the Underwriter to purchase the Firm Securities and the Option Securities, as
the case may be, shall be subject to the accuracy of the representations and
warranties on the part of the Company contained herein as of the Execution Time
and the Closing Date, to the accuracy of the statements of the Company made in
any certificates pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder in all material respects and to the
following additional conditions:
(a) If the Registration Statement has not become effective prior to
the Execution Time, unless the Underwriter agrees in writing to a later
time, the Registration Statement will become effective not later than (i)
6:00 PM New York City time, on the date of determination of the public
offering price, if such determination occurred at or prior to 3:00 PM New
York City time on such date or (ii) 12:00 Noon on the business day
following the day on which the public offering price was determined, if
such determination occurred after 3:00 PM New York City time on such date;
if filing of the Final Prospectus, or any supplement thereto, is required
pursuant to Rule 424(b), the Final Prospectus, and any such supplement,
shall have been filed in the manner and within the time period required by
Rule 424(b); and no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been instituted or threatened.
(b)(i) The Company shall have furnished to the Underwriter the
opinion of Wilson, Sonsini, Xxxxxxxx & Xxxxxx, counsel for the Company,
dated the Closing Date, to the effect that:
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17
(A) the Company has been duly incorporated, is validly existing as
a corporation in good standing under the laws of Delaware, has the
corporate power and authority to own its property and to conduct its
business as described in the Final 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;
(B) this Agreement has been duly authorized, executed and
delivered by the Company;
(C) the Indenture and the Supplemental Indenture pursuant to
which the Securities are to be issued have been duly authorized,
executed and delivered by the Company, and constitute valid and binding
obligations of the Company enforceable against the Company in
accordance with their respective terms (assuming due execution and
delivery by the Trustee); the Indenture has been duly qualified under
the Trust Indenture Act;
(D) the Company's authorized equity capitalization as of July 29,
1997 is as set forth in the Final Prospectus.
(E) the Securities have been duly authorized by all necessary
corporate action on the part of the Company and when duly executed and
authenticated in accordance with the terms of the Indenture and the
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Supplemental Indenture and delivered to and paid for by the Underwriter
in accordance with the terms of this Agreement, will be valid and
binding obligations of the Company enforceable against the Company in
accordance with their terms and will be entitled to the benefits of the
Indenture, as supplemented by the Supplemental Indenture;
(F) the shares of Common Stock initially issuable on conversion
of the Securities have been duly and validly authorized and reserved
for issuance upon such conversion and, when issued upon conversion in
accordance with the terms of the Indenture and the Supplemental
Indenture, will be validly issued, fully paid and non-assessable, and
there are no preemptive or, to such counsel's knowledge, other rights
to subscribe for or purchase any of the shares of Common Stock
issuable upon conversion of the Securities pursuant to the Company's
charter or bylaws or, to the knowledge of such counsel, any Reviewed
Agreement binding on the Company ("Reviewed Agreement" to be defined as
any agreement which would be required to be filed as an Exhibit to an
Annual Report on Form 10-K of the Company pursuant to Item 601(b)(10)
of Regulation S-K if such Form 10-K was filed as of the date of such
opinion, as certified to such counsel by the Company);
(G) such counsel does not know of any legal or governmental
proceedings pending or threatened to which the Company or any of its
subsidiaries is subject other than proceedings fairly summarized in
all respects in the Final Prospectus and, to such counsel's knowledge,
proceedings that would not have a material adverse affect on the
Company and its subsidiaries, taken as a whole, or on the power or
ability of the Company to perform its obligations under this
Agreement, the Indenture (as supplemented by the Supplemental
Indenture) or the Securities.
(H) the Registration Statement has become effective under the
Act; any required filing of the Basic Prospectus, any Preliminary
Final Prospectus and the Final Prospectus, and any supplements
thereto, pursuant to Rule 424(b) has been made in the manner and
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within the time period required by Rule 424(b); and to the best
knowledge of such counsel, no stop order suspending the effectiveness
of the Registration Statement has been issued, no proceedings for that
purpose have been instituted or threatened and the Registration
Statement and the Final Prospectus (other than the financial
statements and other financial and statistical information contained
therein as to which such counsel need express no opinion) comply as to
form in all material respects with the applicable requirements of the
Act, the Exchange Act and the Trust Indenture Act and the respective
rules thereunder;
(I) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement,
the Indenture, the Supplemental Indenture and the Securities will not
contravene any provision of applicable U.S. federal or state law or
the certificate of incorporation or bylaws of the Company or, to the
knowledge of such counsel and except as set forth in the Final
Prospectus, any Reviewed Agreement binding upon the Company or any of
its subsidiaries, or any judgment, order or decree of any U.S.
federal or state governmental body, agency or court having
jurisdiction over the Company or any of its properties or any of its
subsidiaries or any of their property, and no consent, approval,
authorization or order of or qualification with any U.S. federal or
state governmental body or agency is required for the performance by
the Company of its obligations under this Agreement, the Indenture,
the Supplemental Indenture and the Securities except such as are
specified and have been obtained, such as are contemplated by the terms
thereof, and such as may be required by the securities or Blue Sky laws
of the various states in connection with the purchase and distribution
of the Securities by you;
(J) The statements in (i) the Final Prospectus under the captions
"Description of Notes" and "Description of Capital Stock," (ii) in the
Basic Prospectus under the caption "Description of Debt Securities"
and (iii) in the Company's Current Report on Form 8-K filed with the
Commission on July 29, 1997 under the caption "Litigation," insofar as
such statements constitute a summary of the legal matters, documents or
proceedings referred to therein, fairly summarize in all material
respects the matters referred to therein.
(K) The statements in the Final Prospectus under the caption
"Certain Federal Income Tax Considerations," insofar as such statements
constitute a summary of the United States federal tax laws referred to
therein, are accurate and fairly summarize in all material respects the
United States federal tax laws referred to therein.
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(L) To the best of such counsel's knowledge, no holders of
securities of the Company have rights to the registration of such
securities under the Registration Statement.
In addition, such counsel shall state that nothing has come to the
attention of such counsel which causes such counsel to believe that (other than
financial statements and other financial and statistical information included
therein as to which such counsel need not express any belief) the Final
Prospectus when issued contained, or as of the date such opinion is delivered
contains, any untrue statement of a material fact or omitted or omits 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. With respect to
this paragraph, counsel may state their opinion and belief are based upon their
participation in the preparation of the Final Prospectus (and any amendments or
supplements thereto) and the documents incorporated therein by reference and
review and discussion of the contents thereof, including incorporated documents,
but are without independent check or verification except as specified.
Such counsel's opinions that any agreement is valid, binding or
enforceable in accordance with its terms may be qualified as to:
i) limitations imposed by bankruptcy, insolvency, reorganization,
arrangement, fraudulent conveyance, moratorium or other laws
relating to or affecting the rights of creditors generally;
ii) rights to indemnification and contribution which may be limited by
applicable law or equitable principles; and
iii) general principles of equity, including without limitation
concepts of materiality, reasonableness, good faith and fair
dealing, and the possible unavailability of specific performance
or injunctive relief, regardless of whether such validity and
binding effect are considered in a proceeding in equity or at law.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any
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jurisdiction other than the United States, the State of California, the
General Corporation Law of the State of Delaware or the State of New York
(it being understood that such counsel's opinion as to matters of laws of
the State of New York shall be limited to the validity, binding effect and
enforceability of Indenture, Supplemental Indenture and Securities set
forth in paragraphs (C) and (E) above, to the extent they deem proper and
specified in such opinion, upon the opinion of other counsel of good
standing whom they believe to be reliable and who are satisfactory to
counsel for the Underwriters and (B) as to matters of fact, to the extent
they deem proper, on certificates of responsible officers of the Company and
public officials. References to the Final Prospectus in this paragraph (b)
include any supplements thereto at the Closing Date.
(ii) The Company shall have furnished to the Underwriters an
opinion for each of the Material Subsidiaries from Counsel qualified
to give such opinion, dated the Closing Date, to the effect that each
Material Subsidiary of the Company has been duly incorporated, is
validly existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described
in the Final 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) On the Closing Date, the Company shall have furnished to the
Underwriter the opinion of Xxxxxx X. Kreyder, Vice President, Finance and
Corporate General Counsel of the Company, addressed to the Underwriter to
the effect that:
(i) To such counsel's knowledge, after due inquiry, there is no
franchise, contract or other document of a character required to be
disclosed in the Registration Statement or Prospectus, or to be filed
as an exhibit, that is not described or filed as required.
(d) The Underwriter shall have received from Xxxxxx, Xxxxxx & Xxxxx
LLP, counsel for the Underwriter, such opinion or opinions, dated the
Closing Date, with respect to the issuance and sale of the Securities, the
Indenture, the Registration Statement, the Final Prospectus (together with
any supplement thereto) and other related matters as the Underwriter may
reasonably require, and the Company shall have furnished to such counsel
such documents as they request for the purpose of enabling them to pass
upon such matters.
(e) The Company shall have furnished to the Underwriter a certificate
of the Company, signed by the Chairman of the Board or the President and
the principal financial or accounting officer of the Company, dated the
Closing Date, to the effect that the signers of such
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certificate have carefully examined the Registration Statement, the Final
Prospectus, any supplement to the Final Prospectus and this Agreement and
that:
(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as of
the Closing Date with the same effect as if made on the Closing Date
and the Company has complied in all material respects 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 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
incorporated by reference in the Final Prospectus (exclusive of any
supplement thereto), there has been no material adverse change in the
condition (financial or other), earnings, business or properties of
the Company and its subsidiaries, whether or not arising from
transactions in the ordinary course of business, except as set forth
in or contemplated in the Final Prospectus (exclusive of any
supplement thereto).
(f) At the Closing Date, Ernst & Young LLP shall have furnished to the
Underwriter a letter or letters (which may refer to letters previously
delivered to the Underwriter), dated as of the Closing Date, in form and
substance satisfactory to the Underwriter, confirming that they are
independent auditors 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 consolidated financial statements
and financial statement schedule incorporated in the Registration
Statement and the Final Prospectus and reported on by them comply in
form in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the related published
rules and regulations;
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(ii) on the basis of: a reading of the latest unaudited
consolidated financial statements made available by the Company;
procedures performed in accordance with standards established by the
American Institute of Certified Public Accountants on the unaudited
interim financial information incorporated in the Registration
Statement and the Final Prospectus; 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 fiscal 1998 minutes of the meetings of the
stockholders, board of directors and Audit and Compensation 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 the
date of the most recent audited financial statements incorporated in
the Final Prospectus, nothing came to their attention which caused them
to believe that:
(1) any unaudited consolidated financial statements
incorporated in the Registration Statement and the Final
Prospectus do not comply in form in all material respects with
applicable accounting requirements and with the published rules
and regulations of the Commission with respect to financial
statements included or incorporated in quarterly reports on Form
10-Q under the Exchange Act; and said unaudited financial
statements are not in conformity with generally accepted
accounting principles applied on a basis substantially consistent
with that of the audited financial statements included or
incorporated in the Registration Statement and the Final
Prospectus;
(2) with respect to the period subsequent to the date of the
period subsequent to the date of the most recent financial
statements (other than capsule information), audited or unaudited,
incorporated in the Registration Statement and the Final
Prospectus, there were any changes, at a
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specified date not more than five business days prior to the date
of the letter, in the capital stock of the Company (other than from
activity pursuant to equity awards under various benefit plans or
pursuant to conversion of convertible subordinated notes) or any
increases in the long-term debt (excluding current portion) of the
consolidated Company (other than borrowings which may have occurred
under credit agreements in place at June 29, 1997, as amended, or
resulting from changes in foreign currency exchange rates) as
compared with the amounts shown on the most recent consolidated
balance sheet incorporated in the Registration Statement and the
Final Prospectus, or for period from the date of the most recent
financial statements incorporated in the Registration Statement and
the Final Prospectus to such specified date there were any
decreases, as compared with the corresponding period in the
preceding year in net revenues 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 Underwriter; and
(iii) they have performed certain other specified procedures as
agreed by the Underwriter 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
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and the Final Prospectus and in Exhibit 12 to the Registration
Statement, the Company's Annual Report on Form 10-K, incorporated in
the Registration Statement and the Final Prospectus, and the Company's
current Report on Form 8-K dated July 28, 1997, incorporated in the
Registration Statement and the Final Prospectus, agrees with the
accounting records of the Company and its subsidiaries, excluding any
questions of legal interpretation.
References to the Final Prospectus in this paragraph (f) include any
supplement thereto at the date of the letter.
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(g) 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 Final 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 5 or
(ii) any change, or any development involving a prospective change, in or
affecting the business or properties of the Company and its subsidiaries
the effect of which, in any case referred to in clause (i) or (ii) above,
is, in the judgment of the Underwriter, so material and adverse as to make
it impractical or inadvisable to proceed with the offering or delivery of
the Securities as contemplated by the Registration Statement (exclusive of
any amendment thereof) and the Final Prospectus (exclusive of any
supplement thereto).
(h) 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.
(i) Prior to the Closing Date, the Company shall have furnished to the
Underwriter such further information, certificates and documents as the
Underwriter may reasonably request.
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If any of the conditions specified in this Section 5 shall not have
been fulfilled in all material respects 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 in all material respects reasonably satisfactory in form
and substance to the Underwriter and counsel for the Underwriter, this Agreement
and all obligations of the Underwriter hereunder may be canceled at, or at any
time prior to, the Closing Date by the Underwriter. Notice of such cancelation
shall be given to the Company in writing or by telephone or telegraph confirmed
in writing.
6. Reimbursement of Underwriter's Expenses. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriter set forth in Section 5 hereof is not satisfied,
because of any termination pursuant to Section 9 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 any of the Underwriter, the Company will reimburse the Underwriter
upon demand for all out-of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been incurred by it in connection with
the proposed purchase and sale of the Securities.
Notwithstanding the foregoing, on or promptly after the Closing Date (or
the settlement date of the Option Securities, as the case may be), the
Underwriter agrees to reimburse the Company for certain expenses incurred by the
Company in connection with the offering of the Securities up to a maximum amount
of $312,500 ($359,375 if the Option is exercised in full).
7. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless the Underwriter,
the directors, officers, employees and agents of the Underwriter and each
person who controls the 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, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the registration statement for the registration
of the Securities as originally filed or in any amendment thereof, or in
the Basic Prospectus, any Preliminary Final Prospectus or the Final
Prospectus, or in any amendment thereof or supplement thereto, or arise out
of or are based upon the omission or
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alleged omission to state therein 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 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 furnished to the Company by or on
behalf of the Underwriter specifically for inclusion therein. This
indemnity agreement will be in addition to any liability which the Company
may otherwise have.
(b) The Underwriter 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 from the Company to the Underwriter, but only with reference to
written information relating to the Underwriter furnished to the Company by
or on behalf of the Underwriter specifically for inclusion in the documents
referred to in the foregoing indemnity. This indemnity agreement will be in
addition to any liability which the Underwriter may otherwise have. The
Company acknowledges that the statements set forth in the last paragraph of
the cover page and under the heading "Underwriting" in any Preliminary Final
Prospectus or the Final Prospectus constitute the only information furnished
in writing by or on behalf of the Underwriter for inclusion in the documents
referred to in the foregoing indemnity, and you, confirm that such
statements are correct.
(c) Promptly after receipt by an indemnified party under this Section
7 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 7, 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
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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 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 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,
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
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30
liability arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b) of
this Section 7 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Underwriter 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 the Underwriter may be subject in such proportion as is
appropriate to reflect the relative benefits received by the Company and by
the Underwriter from the offering of the Securities; provided, however, that
in no case shall the Underwriter be responsible for any amount in excess of
the underwriting discount or commission applicable to the Securities
purchased by the Underwriter hereunder. If the allocation provided by the
immediately preceding sentence is unavailable for any reason, the Company
and the Underwriter shall contribute in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company and of the Underwriter 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), and benefits received by the Underwriter 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 Final Prospectus. Relative fault shall be
determined by reference to whether any alleged untrue statement or omission
relates to information provided by the Company or the Underwriter. The
Company and the Underwriter agree that it would not be just and equitable if
contribution were 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
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Section 7, 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 the
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).
8. Termination. This Agreement shall be subject to termination in
the absolute discretion of the Underwriter, by
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32
notice given to the Company prior to delivery of and payment for the Securities,
if prior to such time (i) trading in the Company's Common Stock shall have been
suspended by more than one hour by the Commission or the National Association of
Securities Dealers Automated Quotation National Market System or trading in
securities generally on the New York Stock Exchange or the National Association
of Securities Dealers Automated Quotation National Market System shall have been
suspended or limited or minimum prices shall have been established on either of
such Exchange or Market System, (ii) a banking moratorium shall have been
declared either by 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 is such as to make it, in the judgment of
the Underwriter, impracticable or inadvisable to proceed with the offering or
delivery of the Securities as contemplated by the Final Prospectus (exclusive of
any supplement thereto).
9. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of
the Company or its officers and of the Underwriter set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation made by or on behalf of the Underwriter or the Company or any
of the officers, directors or controlling persons referred to in Section 7
hereof, and will survive delivery of and payment for the Securities. The
provisions of Sections 6 and 7 hereof shall survive the termination or
cancelation of this Agreement.
10. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Underwriter, will be mailed,
delivered or telegraphed and confirmed to it at Xxxxx Xxxxx Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx, 00000; or, if sent to the Company, will be mailed, delivered or
telegraphed and confirmed to it at 000 XxXxxxxx Xxxxxxxxx, Xxxxxxxx, Xxxxxxxxxx
00000, attention of the legal department.
11. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 7 hereof,
and no other person will have any right or obligation hereunder.
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12. Applicable Law. This Agreement will be governed by and construed
in accordance with the laws of the State of New York.
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 Underwriter.
Very truly yours,
Quantum Corporation
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------
Xxxxxxx X. Xxxxxxx
Executive Vice President, Finance
and Chief Financial Officer
The foregoing Agreement is
hereby confirmed and accepted
as of the date first
above written.
Salomon Brothers Inc
By: Salomon Brothers Inc
By: /s/ Xxxxxxx Xxxx
----------------------------
Associate
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SCHEDULE I
Principal Amount
of Securities to
Underwriter be Purchased
----------------
Salomon Brothers Inc............................... $250,000,000
This is a Delayed Offering
