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As filed with the Securities and Exchange Commission on June 29, 1995 Registration No. 33-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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LTX CORPORATION
(Exact name of registrant as specified in its charter)
MASSACHUSETTS 04-2594045
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
LTX PARK AT UNIVERSITY AVENUE
WESTWOOD, MASSACHUSETTS 02090
(617) 461-1000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
JOHN J. ARCARI
LTX CORPORATION
LTX PARK AT UNIVERSITY AVENUE
WESTWOOD, MASSACHUSETTS 02090
(617) 461-1000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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Copies of all communications to:
RICHARD M. HARTER, ESQ. EDWIN L. MILLER, JR., ESQ.
Bingham, Dana & Gould Testa, Hurwitz & Thibeault
150 Federal Street 53 State Street
Boston, Massachusetts 02110 Boston, Massachusetts 02109
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. / /
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
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Calculation of Registration Fee
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<S> <C> <C> <C> <C>
Proposed Proposed
Maximum Maximum
Amount Offering Aggregate Amount of
Title of Each Class of to be Price Per Offering Registration
Securities to be Registered Registered (1) Share (2) Price (2) Fee
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Common Stock ($.05 par value)............. 2,241,891 shares $8.50 $19,056,074 $6,571.06
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(1) This Registration Statement relates to the shares of Common Stock
issuable upon conversion of the registrant's 13 1/2% Convertible Subordinated
Debentures due 2011 and shares of Common Stock to be issued to the Purchasers
in respect of such Debentures not converted and the possible reoffering of such
shares of Common Stock by the Purchasers as described in the Prospectus.
(2) Pursuant to Rule 457(c) of the Securities Act of 1933, and solely for the
purpose of calculating the amount of the registration fee, the proposed
maximum offering price per share and the proposed maximum aggregate offering
price are based on the average of the high and low sale prices of $8.50 on
June 27, 1995 on the Nasdaq National Market of LTX Corporation Common
Stock.
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Page 2
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
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PROSPECTUS
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2,241,891 Shares
LTX CORPORATION
Common Stock
($0.05 par value)
The 2,241,891 shares of Common Stock of LTX Corporation (the
"Company") covered hereby are the maximum number of shares of Common Stock
issuable upon conversion of the Company's 13-1/2% Convertible Subordinated
Debentures Due 2011 (the "Debentures").
The Company has called the Debentures for redemption on July 24, 1995
(the "Redemption Date") at a redemption price of $1,000 for each $1,000
principal amount of Debentures plus accrued interest of $37.13, or a total of
$1,037.13 for each $1,000 principal amount of Debentures. Prior to 5:00 p.m.,
E.D.T., on the Redemption Date, the Debentures may be converted, at the option
of the holders, at a conversion price of $7.00 per share, into 142.86 shares of
the Company's Common Stock for each $1,000 principal amount of Debentures.
Thereafter, no further conversion of Debentures may be made. Holders who elect
to convert their Debentures into Common Stock will not be entitled to receive
accrued interest. Any Debentures not duly surrendered for redemption or
conversion prior to 5:00 p.m., E.D.T., on the Redemption Date shall become due
and payable and cease to accrue interest on the Redemption Date. The last
reported sale price of the Company's Common Stock on the Nasdaq National Market
on June 27, 1995 was $8.37 per share.
The Company has arranged for Lehman Brothers Inc. and Needham & Company, Inc.
(the "Purchasers"), subject to certain conditions, to purchase on the Redemption
Date any Debentures properly delivered to the Agent referred to herein for
purchase prior to 5:00 p.m., E.D.T., on the Redemption Date, and to convert such
purchased Debentures into Common Stock. The Purchasers will pay $1,001.50 for
each $1,000 principal amount of such Debentures and the Company will pay accrued
interest of $37.13 for each $1,000 principal amount of Debentures, for a total
payment of $1,038.63 for each $1,000 principal amount of Debentures. Prior to
such time, the Purchasers may also purchase Debentures in the open market, and
any Debentures so purchased will also be converted into Common Stock. In
addition, in the event that less than all the Debentures are surrendered for
conversion on or prior to the Redemption Date, the Company has arranged for the
Purchasers to purchase directly from the Company, subject to certain conditions,
up to that number of shares of Common Stock which would have been issuable upon
conversion of the Debentures not so surrendered and converted. This Prospectus
also covers any such shares sold to the Purchasers and the resale to the public
of any such shares. See "Standby and Other Arrangements" herein.
The redemption price, number of shares issuable upon conversion and
the price payable by the Purchasers for Debentures to be sold to the Purchasers
are expressed herein by reference to $1,000 principal amount of Debentures.
Each of such prices and amounts will be appropriately adjusted to the extent
any Debentures are held in principal amounts which are not multiples of $1,000.
SEE "RISK FACTORS" ON PAGE 3 FOR A DISCUSSION OF CERTAIN FACTORS THAT
SHOULD BE CONSIDERED IN CONNECTION WITH THE COMMON STOCK OFFERED HEREBY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
Prior to and after the Redemption Date, the Purchasers may offer
Common Stock acquired through the purchase and conversion of Debentures or
pursuant to the standby arrangements directly to the public at prices set from
time to time by the Purchasers. Each such price when set will not exceed the
highest price at which a dealer not participating in the distribution is then
offering shares of Common Stock to other dealers plus the amount of any
concession to dealers, and an offering price on any calendar day will not be
increased more than once during such day. In effecting such transactions, the
Purchasers may realize profits or losses independent of the compensation
referred to under "Standby and Other Arrangements." The Purchasers may also
make sales to dealers at prices that represent concessions from the prices at
which such shares are then being offered to the public. The amount of such
concessions will be determined from time to time by the Purchasers. Any Common
Stock so offered is offered subject to prior sale, when, as and if received by
the Purchasers, and subject to their right to reject orders in whole or in
part.
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LEHMAN BROTHERS NEEDHAM & COMPANY, INC.
The date of this Prospectus is June 29, 1995.
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IN CONNECTION WITH THIS OFFERING, THE PURCHASERS MAY OVER-ALLOT OR
EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON
STOCK, THE DEBENTURES OR BOTH AT LEVELS ABOVE THAT WHICH MIGHT OTHERWISE
PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED
AT ANY TIME.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). Such reports,
proxy statements and other information filed by the Company can be inspected
and copied at the public reference facilities maintained by the Commission at
450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549, and at the
following Regional Offices of the Commission: New York Regional Office, 7
World Trade Center, Suite 1300, New York, New York 10048; Chicago Regional
Office, Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661. Copies of such material may be obtained from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C., at
prescribed rates.
A Registration Statement on Form S-3 relating to the securities
offered hereby has been filed by the Company with the Commission. This
Prospectus, which constitutes a part of the Registration Statement, does not
contain all of the information set forth in the Registration Statement and the
exhibits thereto. For further information with respect to the Company and the
securities offered hereby, reference is made to such Registration Statement and
exhibits. Statements contained in this Prospectus as to the contents of any
contract or other document referred to are not necessarily complete, and in
each instance reference is made to the copy of such contract or other document
filed as an exhibit to the Registration Statement or otherwise filed with the
Commission, each such statement being qualified in all respects by such
reference. A copy of the Registration Statement may be inspected without charge
at the Commission's principal offices in Washington, D.C., and copies of all or
any part thereof may be obtained from the Commission upon the payment of
certain fees prescribed by the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended
July 31, 1994, the Company's Quarterly Reports on Form 10-Q for the quarters
ended October 31, 1994, January 31, 1995 and April 30, 1995, the description of
the Company's Common Stock contained in the Company's Registration Statement on
Form 8-A filed on November 24, 1982, as amended by the Company's Form 8-A/A
filed with the Commission on September 30, 1993, and the description of the
Company's Common Stock Purchase Rights (the "Rights") contained in the
Company's Registration Statement on Form 8-A filed with the Commission on May
17, 1989, as amended by the Company's Form 8-A/A filed with the Commission on
September 30, 1993, are incorporated herein by reference. All documents filed
by the Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange
Act subsequent to the date of this Prospectus and prior to the termination of
the offering of the Common Stock offered hereby shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
respective dates of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated herein by reference shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated herein by reference
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon written or oral
request from such person, a copy of any and all of the documents that have been
incorporated by reference in this Prospectus, other than exhibits to such
documents not specifically incorporated by reference. Written or telephone
requests for such documents should be directed to LTX Corporation, LTX Park at
University Avenue, Westwood, Massachusetts 02090 (Telephone (617) 461-1000),
Attention: John J. Arcari, Chief Financial Officer.
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RISK FACTORS
CYCLICALITY OF SEMICONDUCTOR INDUSTRY
The Company's business is largely dependent upon the capital expenditures of
semiconductor manufacturers. The semiconductor industry is highly cyclical and
has historically experienced recurring periods of oversupply, which often have
had a severe detrimental effect on such industry's demand for test equipment.
The Company attempts to mitigate the risk of cyclicality in the semiconductor
industry and changes in particular segments of the industry by offering
products to a wide geographic base of customers in the digital, linear and
mixed signal integrated circuit ("IC") and discrete component markets.
However, any factor adversely affecting any particular market or segment would
adversely affect the Company's business and results of operations. No
assurance can be given that the Company's business and results of operations
will not be materially and adversely affected if downturns or changes in any
particular market segments of the semiconductor industry occur in the future,
especially if all of the market segments in which the Company participates
experience downturns at the same time.
OPERATING LOSSES; FLUCTUATIONS IN REVENUES AND OPERATING RESULTS
The Company incurred net losses its last three fiscal years, primarily as a
result of semiconductor industry cyclicality and reductions in orders from
certain major customers. Although the Company recognized a net profit of
$5,614,000 in its first three quarters of fiscal 1995, there can be no
assurance that the Company will be profitable in the future.
The Company's revenues and operating results have fluctuated and could in
the future fluctuate significantly from period to period, including from one
quarterly period to another, due to a combination of factors, including the
cyclical demand of the semiconductor business, the large selling prices of the
Company's test systems (which typically result in a long selling process) and
the mix between and configuration of digital and linear/mixed signal and
discrete component test systems sold in a particular period. The Company has
also experienced significant fluctuations in its gross margin on product sales.
Given the relatively large selling prices of the Company's test systems, sales
of a limited number of test systems account for a substantial portion of
revenues in any particular fiscal quarter and a single transaction could
therefore have a significant impact on revenues and gross margins for that
fiscal quarter. The impact of these and other factors on the Company's revenues
and operating results in any future period cannot be forecast with accuracy. In
addition, the need for continued investment in research and development, for
capital equipment requirements and for extensive worldwide customer support
capability results in significant fixed costs which would be difficult to
reduce in the event that the Company does not meet its objectives.
CUSTOMER CONCENTRATION
Sales to the Company's top ten customers accounted for 58% of net sales in
both fiscal 1994 and fiscal 1993 and approximately 66% of net sales in fiscal
1992. The loss of a major customer or reduction in orders by major customers,
including reductions due to market or competitive conditions in the
semiconductor industry, has had in the past and would have in the future an
adverse effect on the Company's business and results of operations. In
addition, the Company's ability to increase its sales will depend in part upon
its ability to obtain orders from new customers. There is no assurance that the
Company will be able to do so. Once a semiconductor manufacturer has initially
selected a particular semiconductor test equipment vendor's test system for a
generation of semiconductors and made a substantial investment to develop
related test program software and interfaces, the manufacturer is more likely
to continue to purchase test systems from that vendor for the entire generation
of semiconductors and, possibly, subsequent generations of similar
semiconductors as well.
IMPORTANCE OF NEW PRODUCT INTRODUCTION
The semiconductor test equipment ("STE") market is subject to rapid
technological change and new product introductions. The Company's ability to
remain competitive in the digital, linear and mixed signal IC and discrete
component markets will depend upon its ability to successfully enhance existing
test systems and develop new generations of test systems and to introduce these
new products on a timely and cost effective basis. The Company also has to
manufacture its products in volume at a competitive price and on a timely basis
to enable customers to integrate them into their operations as they begin to
produce the next generation of semiconductors. There can be no assurance that
the Company will be successful in the introduction and volume manufacture of
its new products, that such introduction will coincide with the development by
semiconductor manufacturers of their next generation semiconductors or that
such products will satisfy customer needs or achieve market acceptance. The
Company's
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failure to have a competitive test system available when required by a
semiconductor manufacturer could make it substantially more difficult for the
Company to sell test systems to that manufacturer for a number of years. The
Company has in the past experienced delays in introducing certain of its
products and enhancements, and there can be no assurance that it will not
encounter technical or other difficulties that could in the future delay the
introduction of new products or enhancements. In addition, the Company may
incur substantial costs to ensure the functionality and reliability of its new
products early in the products' life cycles. Furthermore, announcements by the
Company or its competitors of new products could cause customers to defer or
forego purchases of the Company's existing products, which would also adversely
affect the Company's business and results of operations.
HIGHLY COMPETITIVE INDUSTRY
The STE industry is highly competitive in all areas of the world. Most of
the Company's major competitors have substantially greater financial resources
and more extensive engineering, manufacturing, marketing and customer support
capabilities than the Company. The Company expects its competitors to continue
to improve the performance of their current products and to introduce new
products with improved price and performance characteristics. New product
introductions by the Company's competitors could cause a decline in sales or
loss of market acceptance of the Company's existing products. In addition,
increased competitive pressure could lead to intensified price based
competition, resulting in lower prices and adversely affecting the Company's
business and results of operations. In particular, at the end of a product life
cycle and as the Company and its competitors introduce more technologically
advanced products, it becomes more difficult to maintain established prices for
the earlier introduced product. From time to time, the Company's test systems
are sold by third parties as used equipment at prices substantially below the
prices of new test systems sold by the Company. Such sales of used test systems
may adversely affect the Company's sales of new test systems. Certain of the
Company's customers have also developed test equipment. The Company believes
that to remain competitive it will require significant financial resources for
investment in new product development and for the maintenance of customer
support centers worldwide. There can be no assurance that the Company will be
able to compete successfully in the future.
DEPENDENCE UPON KEY PERSONNEL
The Company's success is dependent upon certain key management and technical
personnel. There is intense competition for qualified employees among companies
in the semiconductor test equipment industry, and the loss of certain of the
Company's employees or an inability to attract and motivate highly skilled
employees could adversely affect its business.
PROPRIETARY RIGHTS
The Company's future success depends in part upon its proprietary
technology. Although the Company attempts to protect its proprietary technology
through a combination of contract provisions, trade secrets, copyrights and
patents, it believes that its future success depends more upon its engineering,
manufacturing, marketing and service skills. There can be no assurance that the
steps taken by the Company to protect its proprietary rights will be adequate
to prevent misappropriation of its technology or the independent development by
others of similar technology.
The use of patents to protect hardware and software has increased in the STE
industry. The Company has at times been notified of claims that it may be
infringing patents issued to others. Although there are no pending actions
against the Company regarding any patents, and the Company has not been
notified of any claims since 1990, no assurance can be given that infringement
claims by third parties in the future will not have a material and adverse
affect on the Company's business and results of operations. As to any claims
asserted against the Company, the Company may seek or be required to obtain a
license under the third party's intellectual property rights. There can be no
assurance, however, that a license will be available under reasonable terms or
at all. In addition, the Company could decide to resort to litigation to
challenge such claims or a third party could resort to litigation to enforce
such claims. Such litigation could be expensive and time concerning and could
materially adversely affect the Company's business and results of operations.
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DEPENDENCE ON KEY SUPPLIERS
Most of the components for the Company's products are available from a
number of different suppliers; however, certain components are purchased from a
single supplier. Although LTX believes that all single-source components are
currently available in adequate amounts, there can be no assurance that
shortages will not develop in the future. Any disruption or termination of
supply of certain single-source components could have an adverse effect on the
Company's business and results of operations.
VOLATILITY OF STOCK PRICE
The Company's Common Stock has experienced substantial price volatility,
particularly as a result of quarter to quarter variations in the actual or
anticipated financial results of, or announcements by, the Company, its
competitors or its customers concerning technological innovations, new products
or developments concerning patents or proprietary rights. In addition, the
stock market has experienced extreme price and volume fluctuations which have
particularly affected the market price of many technology companies and which
have often been unrelated to the operating performance of these companies.
These broad market fluctuations, as well as general economic and political
conditions, may have an unfavorable effect on the market price of the Company's
Common Stock.
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THE COMPANY
LTX Corporation (the "Company" or "LTX") designs, manufactures and
markets automatic test equipment for the semiconductor industry that is used to
test digital, linear and mixed signal (a combination of digital and linear)
integrated circuits ("ICs") and discrete semiconductor components. The Company
currently offers products in four broad categories: three lines of
semiconductor test systems and a line of test system networking products. The
three lines of test systems are: digital test systems, which test digital ICs,
including microprocessors and microcontrollers; linear/mixed signal test
systems, which test a wide range of linear and mixed signal ICs; and discrete
component test systems, which test small signal and high-power semiconductor
components. The Company also sells service and applications support for its
test systems. The semiconductors tested by the Company's test systems are
widely used in the computer, communications, automotive and consumer
electronics industries. The Company markets its products worldwide to both
manufacturers and users of digital, linear and mixed signal ICs and discrete
semiconductor components.
LTX is a Massachusetts corporation formed in 1976. Its principal
offices are located at LTX Park at University Avenue, Westwood, Massachusetts
02090, and its telephone number is (617) 461-1000. Unless the context indicates
otherwise, references in this Prospectus to "LTX" or the "Company" are to LTX
Corporation and its consolidated subsidiaries.
USE OF PROCEEDS
The net proceeds to be received by the Company from the sale to the Purchasers
of Common Stock pursuant to the agreement described herein under "Standby and
Other Arrangements" will be used to redeem the Debentures not tendered for
conversion or for sale to the Purchasers. The remainder, if any, will be used
for general corporate purposes.
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PRICE RANGE OF COMMON STOCK
The Company's Common Stock is traded in the over-the-counter market under the
symbol "LTXX". The following table sets forth for the periods indicated the
actual high and low sales prices per share of Common Stock, as reported by
Nasdaq:
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High Low
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Fiscal 1993:
Year Ended July 31,
First Quarter.............................. $ 2 1/16 $ 1 3/8
Second Quarter............................. $ 4 1/2 $ 1 3/4
Third Quarter.............................. $ 5 7/8 $ 3 1/8
Fourth Quarter............................. $ 6 1/2 $ 4 5/8
Fiscal 1994:
Year Ended July 31,
First Quarter.............................. $ 8 1/4 $ 4 3/4
Second Quarter............................. $ 5 5/8 $ 3 1/8
Third Quarter.............................. $ 4 1/2 $ 2
Fourth Quarter............................. $ 3 3/4 $ 2
Fiscal 1995:
Year Ended July 31,
First Quarter.............................. $ 4 3/4 $ 3
Second Quarter............................. $ 5 11/16 $ 3 1/2
Third Quarter.............................. $ 6 7/16 $ 4 7/8
Fourth Quarter............................. $ 9 3/8 $ 6 (through June 27, 1995)
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On June 27, 1995, the last sale price of the Company's Common Stock,
as reported by Nasdaq, was $8.37. On June 27, 1995, there were 1,240 holders
of record of the Common Stock.
DIVIDEND POLICY
The Company has never paid cash dividends. It is the present policy
of the Company's Board of Directors to retain earnings to finance expansion of
the Company's operations. The Company does not expect to pay dividends in the
foreseeable future.
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REDEMPTION OF DEBENTURES AND
ALTERNATIVES TO REDEMPTION
REDEMPTION OF DEBENTURES
The Company has called all of its outstanding 13 1/2% Convertible
Subordinated Debentures Due 2011 (the "Debentures") for redemption on July 24,
1995 (the "Redemption Date"). Pursuant to the terms of the Indenture dated as
of June 15, 1990 (the "Indenture"), between the Company and The First National
Bank of Boston, as Trustee, under which the Debentures were issued, and as a
result of the call, holders of Debentures are entitled to receive from the
Company upon redemption the sum of $1,000 per $1,000 principal amount of
Debentures plus accrued interest of $37.13, or a total of $1,037.13 for each
$1,000 principal amount of Debentures.
Holders of Debentures have as alternatives to redemption, in addition
to the right to sell their Debentures through usual brokerage facilities (1)
the right to convert their Debentures into Common Stock and (2) the right to
deliver their Debentures to the Agent (as defined below) for purchase at a
price in excess of the redemption price, as described on the cover page of this
Prospectus, below and under "Standby and Other Arrangements" herein. The
availability of these two alternatives will terminate at 5:00 p.m., E.D.T., on
the Redemption Date, as more fully described below.
CONVERSION OF DEBENTURES INTO COMMON STOCK
Prior to 5:00 p.m., E.D.T., on the Redemption Date, Debentures may be
converted at the option of the holder, at a conversion price of $7.00 per
share, into 142.86 shares of the Company's Common Stock for each $1,000
principal amount of Debentures. (Cash will be paid in lieu of any fractional
share). Thereafter no further conversion of Debentures may be made. Upon
conversion of the Debentures, no payment or adjustment will be made in respect
of accrued interest. To convert any Debentures, the holder thereof must
surrender the Debentures therefor, duly endorsed or assigned to the Company or
in blank, to The First National Bank of Boston, as Conversion, Purchase and
Redemption Agent (the "Agent"), accompanied by a written notice to convert,
which may be in the form of the Letter of Transmittal provided to all
registered holders of Debentures. The Debentures may be converted only by
their delivery to the Agent for that purpose prior to 5:00 p.m., E.D.T., on the
Redemption Date. Debentures which are neither delivered for conversion nor
sold to the Purchasers referred to under "Standby and Other Arrangements" will
be redeemed as set forth above.
The last reported sales price of the Company's Common Stock on the
Nasdaq National Market on June 27, 1995 was $8.37 per share. See "Price Range
of Common Stock" herein for additional market price information. As long as the
market price of the Common Stock remains above $7.27 per share, the holders of
Debentures who elect to convert will receive upon conversion Common Stock
having a greater current market value (exclusive of various expenses of sale)
than the amount of cash receivable upon redemption or upon a sale of Debentures
to the Purchasers referred to under "Standby and Other Arrangements".
SALE OF DEBENTURES TO THE PURCHASERS
As an additional alternative to redemption, holders of Debentures may cause
their Debentures to be delivered to the Agent at any time prior to 5:00 p.m.,
E.D.T., on the Redemption Date for purchase, subject to certain conditions, by
the Purchasers on the Redemption Date, who will then convert such purchased
Debentures into Common Stock. The Purchasers will pay $1,001.50 for each
$1,000 principal amount of Debentures and the Company will pay accrued interest
of $37.13 for each $1,000 principal amount of Debentures, for a total payment
of $1,038.63 for each $1,000 principal amount of Debentures. Although the sale
of Debentures to the Purchasers would provide to a holder a larger amount in
cash than the amount payable on redemption, it may, depending on the market
price of the Company's Common Stock, be less favorable than the alternative of
conversion. For further information relating to this alternative, see "Standby
and Other Arrangements" herein.
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SUMMARY OF ALTERNATIVES TO REDEMPTION
Under the foregoing alternatives, based on the last reported sales
price of the Company's Common Stock on the Nasdaq National Market on June 27,
1995 of $8.37, a holder of $1,000 principal amount of Debentures who
converted such Debentures on that date would have received Common Stock having
a market value which would have been in excess of both the redemption price and
the price to be paid upon a sale of Debentures to the Purchasers. As long as
the market price of the Company's Common Stock remains above $7.27 per share,
holders of the Debentures who elect to convert will receive upon conversion
Common Stock having a current market value greater than the amount of cash
receivable upon redemption or upon a sale of Debentures to the Purchasers
referred to under "Standby and Other Arrangements" herein. If a holder of
$1,000 principal amount of Debentures surrenders such Debentures for
redemption, such holder will receive $1,037.13 in cash, or if such Debentures
are sold to the Purchasers, the holder will receive $1,038.63 in cash. The
redemption price, number of shares issuable upon conversion and the price
payable by the Purchasers for Debentures to be sold to the Purchasers are
expressed herein by reference to $1,000 principal amount of Debentures. Each
of such prices and amounts will be appropriately adjusted to the extent any
Debentures are held in principal amounts which are not multiples of $1,000.
IT SHOULD BE NOTED, HOWEVER, THAT THE PRICE OF THE COMMON STOCK RECEIVED UPON
CONVERSION WILL FLUCTUATE IN THE MARKET AND THAT THE HOLDER MAY INCUR VARIOUS
EXPENSES OF SALE IF SUCH COMMON STOCK IS SOLD IN THE MARKET. HOLDERS OF
DEBENTURES ARE URGED TO CONSULT THEIR OWN TAX ADVISORS CONCERNING THE TAX
CONSEQUENCES OF A REDEMPTION, CONVERSION OR SALE OF DEBENTURES.
- 10 -
<PAGE> 13
DESCRIPTION OF COMMON STOCK
The Company's By-laws provide that holders of the Common Stock are
entitled to one vote per share on all matters to be voted upon by the
stockholders. Stockholders are not entitled to cumulative voting in the
election of directors. Holders of Common Stock are entitled to receive such
dividends as may be declared from time to time by the Board of Directors out of
funds legally available therefor. See "Dividend Policy". In the event of
liquidation, dissolution or winding up of the Company, the holders of Common
Stock are entitled to share ratably in all assets remaining after payment of
liabilities. The Common Stock has no preemptive or conversion rights and is not
subject to further calls or assessments by the Company. There are no redemption
or sinking fund provisions applicable to the Common Stock. The Common Stock
currently outstanding is, and the Common Stock to be issued upon conversion of
the Debentures or to be sold to the Purchasers pursuant to the standby
arrangements described herein under "Standby and Other Arrangements" will be,
validly issued, fully paid and non-assessable. Under the Company's By-laws, a
special meeting of stockholders may be called by stockholders only if called by
one or more stockholders who hold at least 40% in interest of the Company's
capital stock entitled to vote at such meeting.
The transfer agent and registrar for the Common Stock is The First
National Bank of Boston.
The Company furnishes to its stockholders annual reports containing
financial statements that have been examined and reported upon, with an opinion
expressed, by its independent public accountants and quarterly reports
containing unaudited financial information for the first three quarters of each
fiscal year.
RIGHTS AGREEMENT
The Board of Directors of the Company adopted a Rights Agreement,
dated as of May 11, 1989, between the Company and The First National Bank of
Boston, as rights agent (the "Rights Agreement") and in connection therewith
issued one common share purchase right for each share of Common Stock then or
thereafter outstanding. The rights will become exercisable only if a person or
group acquires 20% or more of the Company's Common Stock or announces a tender
offer that would result in ownership of 30% or more of the Common Stock.
Initially, each right will entitle a stockholder to buy one share of Common
Stock of the Company at a purchase price of $30.00 per share, subject to
adjustment depending upon the occurrence thereafter of certain events.
Before any person or group has acquired 20% or more of the Common
Stock of the Company, the rights are redeemable by the Company at $0.01 per
right. The rights will expire on May 11, 1999, unless redeemed by the Company
prior to that date.
CLASSIFIED BOARD
The Company's Board of Directors is divided into three classes, with
two classes consisting of three directors and one class consisting of two
directors. Each class serves three years, with the terms of office of the
respective classes expiring in successive years.
CERTAIN EFFECTS
The above described provisions of the Company's By-laws, the Rights
Agreement and the classified board may discourage potential takeover attempts.
The Company's Rights Agreement, in particular, may discourage a future
acquisition of the Company not approved by the Board of Directors in which
stockholders might otherwise receive a higher value for their shares or which a
substantial number and perhaps even a majority of the Company's stockholders
believes to be in the best interests of all stockholders. As a result,
stockholders who might desire to participate in such a transaction may not have
the opportunity to do so. These provisions could have an adverse effect on the
market price of the Common Stock.
- 11 -
<PAGE> 14
STANDBY AND OTHER ARRANGEMENTS
Subject to the terms and conditions set forth in the Standby
Agreement, the Purchasers have severally agreed to purchase, in the respective
percentages set forth below, such Debentures as are properly tendered to the
Agent for sale to the Purchasers, and have further agreed to have such
Debentures converted into the Company's Common Stock. The Purchasers will pay
$1,001.50 for each $1,000 principal amount of such Debentures.
<TABLE>
<CAPTION>
Purchasers Percentage
---------- ----------
<S> <C>
Lehman Brothers Inc. 66 2/3%
Needham & Company, Inc. 33 1/3%
-
100%
</TABLE>
The Standby Agreement provides that the Purchasers are obligated to
purchase on the Redemption Date, subject to certain conditions, all Debentures
properly tendered to the Agent prior to 5:00 p.m., E.D.T., on the Redemption
Date (the "Tendered Debentures"). The Purchasers may also purchase Debentures
in the open market prior to the Redemption Date, and the Purchasers have
agreed with the Company to have any Debentures so purchased converted into the
Company's Common Stock. In addition, in the event less than all of the
outstanding Debentures are surrendered for conversion on or prior to the
Redemption Date, the Purchasers have severally agreed, subject to certain
conditions, to purchase, in the same proportions as their obligations to
purchase Debentures set forth above, on the Redemption Date directly from the
Company up to that number of shares of Common Stock which would have been
issuable upon conversion of the Debentures not so surrendered and converted.
The price to the Purchasers of Common Stock so purchased will be approximately
$7.00 per share. The Company would apply any such proceeds towards payment of
the redemption price of any Debentures presented for payment on or after the
Redemption Date.
The Purchasers propose to offer the Common Stock directly to the
public as set forth on the cover page of this Prospectus. The Purchasers may
also offer the Common Stock to certain securities dealers at prices which may
represent concessions from the prices at which such shares are then being
offered to the public. The Purchasers may allow, and such dealers may reallow,
a concession to certain brokers and dealers. The amount of such concessions and
reallowances will be determined from time to time by the Purchasers. In
effecting such transactions, the Purchasers may realize profits and losses
independent of the compensation referred to below. The Purchasers will remit to
the Company any profits realized by the Purchasers on sales of the shares of
Common Stock purchased from the Company or received upon conversion of the
Tendered Debentures pursuant to the Standby Agreement up to $280,657 and will
remit to the Company fifty percent of any such profit realized by the
Purchasers on sales of such shares in excess of $280,657. The Company has
agreed to indemnify the several Purchasers against certain liabilities,
including liabilities under the Securities Act of 1933, or to contribute to
payments that the Purchasers may be required to make in respect thereof.
The Company has agreed not to sell or otherwise dispose, or to
register or to otherwise facilitate the sale or disposal, of any shares of its
Common Stock or any security convertible into or exchangeable for shares of its
Common Stock from the date of this Prospectus through the date 90 days after
the Redemption Date without the prior written consent of the Purchasers, except
issuances of Common Stock pursuant to the exercise of outstanding stock options
or warrants or upon conversion of the Debentures or the Company's 7 1/4%
Convertible Subordinated Debentures due 2011 and subject to certain other
exceptions.
Pursuant to the terms of the Standby Agreement and in consideration
of their obligations thereunder, the Company has agreed to pay the Purchasers
an amount equal to the sum of (a) $280,657 and (b) an amount per share of
Common Stock acquired by the Purchasers through purchase and conversion of
Debentures or purchased directly from the Company pursuant to the Standby
Agreement of $.376. The Company also has agreed to reimburse the Purchasers
for their out-of-pocket expenses, including the fees and disbursements of their
counsel. The Purchasers will not be entitled to any compensation for assisting
the Company in contacting the holders of Debentures concerning the alternatives
available to them in connection with the redemption of the Debentures.
- 12 -
<PAGE> 15
VALIDITY OF COMMON STOCK
The validity of the Common Stock will be passed upon for the Company
by Pamela A. Keating, General Counsel of the Company. Ms. Keating owns or has
the right to acquire pursuant to stock options 15,000 shares of the Company's
Common Stock.
EXPERTS
The financial statements and schedules of the Company as of July
31,1994 and 1993 and for each of the years in the three-year period ended July
31, 1994 incorporated by reference in this Prospectus and in the Registration
Statement have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their report with respect thereto, and are
incorporated by reference herein in reliance upon the authority of said firm as
experts in giving said reports.
- 13 -
<PAGE> 16
No dealer, salesman, or other person is authorized to give any
information or to make any representations not contained in this Prospectus in
connection with the offer contained herein, and, if given or made, such
information or representations must not be relied upon as having been
authorized by the Company or the Purchasers. This Prospectus does not
constitute an offer to sell, or a solicitation of an offer to buy, any
securities in any jurisdiction to any person to whom it is not lawful to make
such an offer or solicitation in such jurisdiction. All information contained
in this Prospectus is as of the date of this Prospectus. Neither the delivery
of this Prospectus nor any sale or distribution and resale made hereunder
shall, under any circumstances, create any implication that there has been no
change in the affairs of the Company since the date hereof.
- 14 -
<PAGE> 17
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth a reasonably itemized statement of all
expenses other than fees and commissions to the Purchasers in connection with
the issuance and distribution of the shares of Common Stock being registered
hereby. All amounts shown are estimates except the Securities and Exchange
Commission registration fee.
<TABLE>
<S> <C>
SEC registration fee . . . . . . . . . . . . . . . . . . $ 6,571.06
Blue sky fees and expenses . . . . . . . . . . . . . . . 10,000
Trustee fees . . . . . . . . . . . . . . . . . . . . . . 3,500
Legal fees and expenses . . . . . . . . . . . . . . . . 35,000
Accounting fees and expenses . . . . . . . . . . . . . . 20,000
Miscellaneous . . . . . . . . . . . . . . . . . . . . . 5,000
Total . . . . . . . . . . . . . . . . . . . . . $80,251.06
==========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Chapter 156B of the Massachusetts General Laws, under which the
Company is organized, permits a Massachusetts corporation to adopt a provision
in its Articles of Organization eliminating or limiting the liability of a
director to the corporation or its stockholders for monetary damages for breach
of fiduciary duty as a director, provided that such liability does not arise
from certain proscribed conduct (including intentional misconduct and breach of
duty of loyalty).
On December 8, 1987, the stockholders approved an amendment to the
Company's Articles of Organization. The amendment to the Articles of
Organization, which became effective on April 8, 1988, is as follows:
"No director shall be personally liable to the corporation or
any of its stockholders for monetary damages for any breach of
fiduciary duty as a director notwithstanding any provision of law
imposing such liability; provided, however, that this provision shall
not eliminate or limit the liability of a director for (i) any breach
of the director's duty of loyalty to the corporation or its
stockholders, (ii) acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii)
authorizing distributions to stockholders in violation of the
corporation's Articles of Organization or which render the corporation
insolvent or bankrupt, and approving loans to officers or directors of
the corporation which are not repaid and which were not approved or
ratified by a majority of disinterested directors or stockholders, or
(iv) any transaction from which the director derived an improper
personal benefit. No amendment to or repeal of this provision shall
apply to or have any effect on the liability or alleged liability of
any director of the corporation for or with respect to any acts or
omissions of such director occurring prior to the effective date of
such amendment."
The By-laws of the registrant provide for indemnification of officers
and directors as follows:
SECTION 6.5 INDEMNIFICATION.
(a) The Corporation shall indemnify each director and officer
against all judgments, fines, settlement payments and expenses,
including reasonable attorneys' fees, paid or incurred in connection
with any claim, action, suit or proceeding, civil or criminal, to
which he may be made a party or with which he may be threatened by
reason of his being or having been a director or officer of the
corporation, or, at its request, a director, officer, stockholder or
member of any other corporation, firm, association or other
organization or by reason of his serving or having served, at its
request, in any capacity with respect to any employee benefit plan, or
by reason of any action or omission by him in such capacity, whether
or not he continues to be a director or officer at the time of
incurring such expenses or at the time the indemnification is made.
No indemnification shall be made hereunder (i) with respect to
payments and expenses incurred in relation to matters as to which he
shall be finally adjudged in such action, suit or proceeding not to
have acted in good faith and in the reasonable belief that his action
was in the best interests of the corporation (or, to the extent that
such matter relates to service with respect to an employee benefit
plan, in the best interest of the participants or beneficiaries of
such employee benefit plan), or (ii) otherwise prohibited by law. The
foregoing right of indemnification shall not be exclusive of other
rights to which any director or officer may otherwise be entitled and
shall inure to the benefit of the executor or
II-1
<PAGE> 18
administrator of such director or officer. The Corporation may pay
the expenses incurred by any such person in defending a civil or
criminal action, suit or proceeding in advance of the final
disposition of such action, suit or proceeding, upon receipt of an
undertaking by such person to repay such payment if it is determined
that such person is not entitled to indemnification hereunder.
(b) The Board of Directors may, without stockholder approval,
authorize the Corporation to enter into agreements, including any
amendments or modification thereto, with any of its directors,
officers or other persons described in paragraph (a) above providing
for indemnification of such persons to the maximum extent permitted
under applicable law and the Corporation's Articles of Organization
and By-laws.
(c) No amendment to or repeal of this section shall have any
adverse effect on (i) the right of any director or officer under any
agreement entered into prior thereto, or (ii) the rights of any
director or officer hereunder relating to his service, for which he
would otherwise be entitled to indemnity hereunder, during any period
prior to such amendment or repeal.
The Company has a directors' and officers' liability policy that
insures the Company's directors and officers against certain liabilities.
ITEM 16. EXHIBITS
<TABLE>
<S> <C>
1.1 - Form of Standby Agreement
*4.1 - Articles of Organization, as amended, of the Registrant are incorporated herein by reference to Exhibit 2 to the
Registrant's Form 8-A/A filed with the Commission on September 30, 1993 amending the Registrant's Registration
Statement on Form 8-A filed with the Commission on November 24, 1982.
*4.2 - By-laws, as amended, of the Registrant are incorporated herein by reference to Exhibit 3 to the Registrant's
Form 8-A/A filed with the Commission on September 30, 1993 amending the Registrant's Registration Statement on
Form 8-A filed with the Commission on November 24, 1982.
*4.3 - Rights Agreement, as amended, of the Registrant is incorporated herein by reference to Exhibit 1 of the
Registrant's Form 8-A/A filed with the Commission on September 30, 1993 amending the Registrant's Registration
Statement on Form 8-A filed with the Commission on May 17, 1989.
5.1 - Opinion of Pamela A. Keating, Esq.
23.1 - Consent of Arthur Andersen LLP.
23.2 - Consent of Pamela A. Keating, Esq. (included in Exhibit 5.1).
24.1 - Power of Attorney (included on page II-4).
</TABLE>
_________________
* Incorporated herein by reference.
II-2
<PAGE> 19
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933 unless the information required to be included in a
post-effective amendment is contained in periodic reports filed with or
furnished to the Commission by the registrant pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934 that are incorporated by reference in
the registration statement;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement unless the information required to be included in a post-effective
amendment is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the registration
statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers, and controlling
persons of the registrant pursuant to the foregoing provisions described in
Item 15 above, or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
II-3
<PAGE> 20
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the Town of Westwood and Commonwealth of Massachusetts on
the 28th day of June, 1995.
LTX Corporation
June 28,1995 By: /s/ Roger W. Blethen
------------------------------
Roger W. Blethen
Director and President
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints Roger W. Blethen and Martin S.
Francis, or either of them, his true and lawful attorneys-in-fact and agents,
each with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign any amendments or
post-effective amendments to this Registration Statement and to file the same
with all exhibits thereto and other documents in connection therewith with the
Securities and Exchange Commission, granting unto each of said
attorneys-in-fact and agents, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that each of said attorneys-in-fact
and agents, or his substitute or substitutes, may do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Graham C. C. Miller Chairman of the Board June 28, 1995
- ----------------------------------
(Graham C. C. Miller)
/s/ Roger W. Blethen President and Director (Principal June 28, 1995
- ---------------------------------- Executive Officer)
(Roger W. Blethen)
/s/ Martin S. Francis President and Director (Principal June 28, 1995
- ---------------------------------- Executive Officer)
(Martin S. Francis)
/s/ John J. Arcari Chief Financial Officer and Treasurer June 28, 1995
- ---------------------------------- (Principal Financial Officer)
(John J. Arcari)
/s/ Glenn W. Meloni Controller (Principal Accounting June 28, 1995
- ---------------------------------- Officer)
(Glenn W. Meloni)
/s/ Jacques Bouyer Director June 28, 1995
- ----------------------------------
(Jacques Bouyer)
/s/ Fred J. Butler Director June 28, 1995
- ----------------------------------
(Fred J. Butler)
/s/ Roger J. Maggs Director June 28, 1995
- ----------------------------------
(Roger J. Maggs)
</TABLE>
II-4
<PAGE> 21
<TABLE>
<S> <C> <C>
/s/ Robert E. Moore Director June 28, 1995
- ----------------------------------
(Robert E. Moore)
/s/ Samuel Rubinovitz Director June 28, 1995
- ----------------------------------
(Samuel Rubinovitz)
</TABLE>
II-5
<PAGE> 1
EXHIBIT 1.1
LTX CORPORATION
13-1/2% Convertible Subordinated Debentures Due 2011
Standby Agreement
June 29, 1995
LEHMAN BROTHERS INC.
NEEDHAM & COMPANY, INC.
c/o Lehman Brothers Inc.
Three World Financial Center
New York, New York 10285
Dear Sirs:
LTX Corporation, a Massachusetts corporation (the "Company"), hereby
confirms its agreement with the several purchasers named in Schedule I hereto
(the "Purchasers") and with Lehman Brothers Inc., as Representative of the
Purchasers (the "Representative"), as follows:
1. Redemption of Debentures. The Company proposes to call for
redemption on July 24, 1995 (the "Redemption Date"), all outstanding 13-1/2%
Convertible Subordinated Debentures Due 2011 of the Company (the "Debentures"),
at the redemption price of $1,000.00 per $1,000.00 of principal amount of
Debentures, plus accrued interest to the Redemption Date of $37.13, for a total
redemption price of $1,037.13 (the "Redemption Price") per $1,000.00 of
principal amount of Debentures. The Redemption Price shall be appropriately
adjusted with respect to Debentures which are not held in multiples of $1,000.00
with the intention being that the aggregate price payable in redemption of any
Debenture will be the principal amount of such Debenture, plus accrued interest.
The right to convert the Debentures into common stock, $.05 par value, of the
Company (the "Common Stock") will terminate at 5:00 p.m., Eastern time, on the
Redemption Date.
In order to help assure that the maximum principal amount of Debentures
will be converted, the Company desires to make arrangements pursuant to which
the holders of the Debentures may sell such Debentures to the several Purchasers
on the Redemption Date, but prior to 5:00 p.m., Eastern time, on such date, at a
flat price of $1,001.50 per $1,000.00 principal amount of Debentures (the
"Purchase Price"), and the Purchasers will convert all Debentures so purchased
into Common Stock prior to 5:00 p.m., Eastern time, on the Redemption Date. The
Purchase Price shall be appropriately adjusted with respect to Debentures which
are not held in multiples of $1,000.00. In addition, the Company will pay
accrued interest to the Redemption Date to the holders of Debentures sold to
the Purchasers pursuant to the foregoing arrangement.
<PAGE> 2
-2-
In addition, the Company desires to make arrangements pursuant to which
the shares of Common Stock that would have been issuable upon conversion of the
Debentures which have not been surrendered for conversion prior to 5:00 p.m.,
Eastern time, on the Redemption Date (collectively, the "Redemption Debentures")
will be purchased from the Company by the several Purchasers at a price equal to
the aggregate principal amount of the Redemption Debentures (minus the aggregate
amount of cash which would have been delivered by the Company in connection with
conversion of the Redemption Debentures). The shares of Common Stock which would
have been issuable upon conversion of the Redemption Debentures are herein
called the "Conversion Shares."
2. Representations, Warranties and Agreements of the Company. The
Company represents and warrants to and agrees with the Purchasers that:
(a) The Company meets the requirements for the use of Form S-3
under the Act (as defined herein).
(b) A registration statement on Form S-3 relating to the
issuance of Common Stock upon conversion of the Debentures or to the Purchasers
hereunder and the resale of Common Stock acquired by the Purchasers as
contemplated hereby (whether upon conversion of Debentures or the Conversion
Shares) has been prepared by the Company in conformity in all material respects
with the requirements of the Securities Act of 1933, as amended (the "Act"), and
the rules and regulations (the "Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder and has been filed with the
Commission under the Act. Copies of such registration statement have been
delivered by the Company to the Representative. Prior to the filing thereof with
the Commission, the Company has not offered to sell any of the Common Stock
issuable upon conversion of the Debentures, except upon conversion of such
Debentures, or any of the Conversion Shares. As used in this Agreement, unless
the context otherwise requires, "Registration Statement" means that registration
statement (together with all documents incorporated therein by reference) at the
time when it becomes effective under the Act; and "Prospectus" means the
prospectus (together with all documents incorporated or deemed incorporated
therein by reference) included in the Registration Statement with any changes
contained in any prospectus filed with the Commission by the Company pursuant to
Rule 424(b) of the Rules and Regulations.
(c) The Registration Statement, any post-effective amendment
thereof, the Prospectus and the Prospectus as amended or supplemented, including
any document filed by the Company hereafter pursuant to Section 13(a), 13(c), 14
or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), prior to the termination of the offering of any Common Stock acquired by
the Purchasers as contemplated hereby (an "Incorporated Document"), comply and
will comply in all material respects with the requirements of the Act and the
Rules and Regulations and do not and will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided that the
Company makes no representation or warranty as to information contained in or
omitted from the Registration Statement or the Prospectus in reliance
<PAGE> 3
-3-
upon and in conformity with written information furnished to the Company by or
on behalf of the Purchasers specifically for inclusion therein.
(d) The Company's authorized capital stock is as set forth in
the Registration Statement. The issued and outstanding shares of capital stock
of the Company have been duly authorized. The issued and outstanding shares of
capital stock of the Company are validly issued and outstanding, fully paid and
non-assessable, with no personal liability attaching to the ownership thereof.
The issued and outstanding shares of Common Stock are included and quoted for
trading on the National Association of Securities Dealers' Automated Quotation
System -- National Market System (the "NASDAQ NMS"). There is not any preemptive
or other right to subscribe for or to purchase, or any lien, charge,
encumbrance, restriction on voting or transfer of, or any other claim of any
third party on, any issued and outstanding shares of Common Stock, any shares of
Common Stock issuable upon conversion of the Debentures or the Conversion
Shares, pursuant to the Company's Articles of Organization (the "Articles") or
By-Laws (the "By-Laws") or any agreement (other than this Agreement and the
Indenture (as hereinafter defined)) or other instrument to which the Company is
a party or by which the Company may be bound. The authorized, issued and
outstanding capital stock of the Company conforms to the description thereof
contained in the Prospectus. All the issued and outstanding shares of capital
stock of each of the Company's subsidiaries have been duly and validly
authorized and issued and are fully paid and nonassessable, with no personal
liability attaching to the ownership thereof, and are owned directly or
indirectly by the Company as set forth in the Prospectus, free and clear of any
lien, pledge or encumbrance or any claim of any third party.
(e) The shares of Common Stock to be issued upon conversion of
the Debentures and the Conversion Shares have been duly authorized. The shares
of Common Stock issuable upon conversion of the Debentures have been duly
reserved for such conversion. The shares of Common Stock issuable upon
conversion of the Debentures, when issued, and the Conversion Shares, upon
delivery and payment therefor in the manner described herein, will be validly
issued and outstanding, fully paid and non-assessable with no personal liability
attaching to the ownership thereof, will conform to the description of the
Common Stock contained in the Prospectus and will be approved for designation
and quoted for trading on the NASDAQ NMS, subject only to official notice of
issuance if necessary, which the Company will provide in a timely manner.
(f) On and after the date hereof and prior to 5:00 p.m.,
Eastern time, on the Delivery Date (as hereinafter defined), there will be no
change in the outstanding capital stock of the Company and the Company will not
issue or sell or enter into any agreement (other than this Agreement),
arrangement or understanding of any kind, or take any action, for the issuance
or sale of any capital stock of the Company, securities convertible into capital
stock of the Company or warrants or options for the purchase of capital stock of
the Company or securities convertible into capital stock of the Company without
the prior approval of the Representative, except for (i) the issuance of the
Conversion Shares, (ii) the issuance of Common Stock upon conversion of the
Debentures, (iii) the issuance of Common Stock or options therefor pursuant to
any existing stock option or stock purchase plans of the Company, (iv) the
issuance of Common Stock upon the conversion of the Company's 7-1/4% Convertible
Subordinated Debentures due 2011, (v) the
<PAGE> 4
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issuance of shares of Common Stock upon the exercise of rights granted under the
Rights Agreement dated as of May 11, 1989 between the Company and The First
National Bank of Boston, as rights agent (the "Rights Agreement") and (vi) the
issuance of Common Stock pursuant to the exercise of the outstanding warrants
held by Ando Electric Co., Ltd. and Silicon Valley Bank (the "Warrants").
(g) The Debentures are convertible into Common Stock at a
conversion price of $7.00 per share (or 142.86 shares of Common Stock for each
$1,000.00 principal amount of Debentures), by surrender of Debentures to The
First National Bank of Boston, prior to 5:00 p.m., Eastern time, on the
Redemption Date, in the manner described in the Notice of Redemption (as defined
herein) and the accompanying letter of transmittal. The amount of accrued
interest per $1,000.00 of principal amount of the Debentures payable to holders
of Debentures in connection with the redemption contemplated hereby pursuant to
the terms of the Indenture and the Debentures is $37.13. The maximum number of
shares of Common Stock issuable upon conversion of all outstanding Debentures is
2,241,891.
(h) As of 5:00 p.m., Eastern time, on the first business day
preceding the date hereof, there was no more than $15,693,240 aggregate
principal amount of Debentures outstanding; the redemption of all the Debentures
on the Redemption Date has been duly authorized by the Company; on the date of
this Agreement the Debentures will be duly called for redemption on the
Redemption Date in accordance with the terms of the Indenture, dated as of June
15, 1990 (the "Indenture"), between the Company and The First National Bank of
Boston, as trustee (the "Trustee"), and the right to convert the Debentures into
Common Stock shall expire at 5:00 p.m., Eastern time, on the Redemption Date.
(i) The Commission has not issued and, to the knowledge of the
Company, is not threatening to issue any stop order suspending the effectiveness
of the Registration Statement or any other order preventing or suspending the
use of the Prospectus (as amended or supplemented, if the Company shall have
filed with the Commission any amendment thereof or supplement thereto).
(j) Arthur Andersen LLP, whose report appears in the Company's
Annual Report on Form 10-K for the fiscal year ended July 31, 1994, which is
incorporated by reference in the Registration Statement and the Prospectus, are
independent public or certified accountants as required by the Act and the Rules
and Regulations.
(k) Neither the Company nor any of its subsidiaries has
sustained since July 31, 1994, any loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by insurance,
or from any labor dispute or court or governmental action, order or decree,
which loss or interference is material to the Company and its subsidiaries,
taken as a whole. Since the respective dates as of which information is given in
the Registration Statement and the Prospectus (as in effect at the time the
Registration Statement is initially declared effective by the Commission),
except as disclosed in the Prospectus (as in effect at the time the Registration
Statement is initially declared effective by the Commission), (i) there has not
been any material adverse change, or any development known to the Company which
is likely to
<PAGE> 5
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cause or result in a material adverse change, in the business, condition
(financial or other), prospects or results of operations of the Company and its
subsidiaries taken as a whole and (ii) there has not been any material change in
the capital stock of the Company or any of its subsidiaries or any material
adverse change in the indebtedness for money borrowed of the Company or any of
its subsidiaries. Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as disclosed in the
Prospectus, there has been no transaction entered into by the Company or any of
its subsidiaries which is material to the Company and its subsidiaries taken as
a whole other than those in the ordinary course of business.
(l) Each of the Company and its subsidiaries has been duly
incorporated, is validly existing in good standing under the laws of its
jurisdiction of incorporation, is duly qualified to do business and is in good
standing as foreign corporation in each jurisdiction in which its ownership or
lease of properties or the conduct of its business requires such qualification
(except where the failure to so qualify or be in good standing would not have a
material adverse effect upon the Company and its subsidiaries taken as a whole),
and has all power and authority and all material governmental franchises,
licenses and permits necessary to own its properties and to conduct the
businesses in which it is engaged, as described in the Prospectus.
(m) Neither the Company nor any of its subsidiaries is in
default, and no event has occurred which with notice or lapse of time, or both,
would result in the Company or any of its subsidiaries being in default, under
its charter, by-laws or other constituent documents, as amended, or any
agreement, indenture or instrument, the effect of which violation or default
would be material to the Company and its subsidiaries taken as a whole; the
execution, delivery and performance of this Agreement by the Company and the
consummation by the Company of the transactions contemplated hereby and by the
Notice of Redemption (as hereinafter defined) have been duly authorized by all
necessary corporate action and will not conflict with, result in the creation or
imposition of any lien, charge or encumbrance upon any of the assets of the
Company or any of its subsidiaries pursuant to the terms of, or constitute a
breach or default under, any agreement, indenture or instrument, or result in a
violation of (i) the provisions of the Articles or the By-Laws of the Company or
the charter or other constituent documents or by-laws of any of its
subsidiaries, in each case as amended, or (ii) any statute or any order, rule or
regulation of any court or governmental agency having jurisdiction over the
Company, any of its subsidiaries or their respective properties; and except as
required by the Act, the Exchange Act and applicable state securities laws, no
consent, authorization or order of, or filing or registration with, any court or
governmental agency is required for the execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby and
by the Notice of Redemption.
(n) There is no litigation or governmental proceeding pending
or, to the knowledge of the Company, threatened against the Company or any of
its subsidiaries which if adversely decided could reasonably be expected to
result in any material adverse change in the business, condition (financial or
other) or results of operations of the Company and its subsidiaries taken as a
whole.
<PAGE> 6
-6-
(o) The financial statements included or incorporated by
reference in the Registration Statement and the Prospectus present fairly, and
the financial statements included in any Incorporated Document will present
fairly, the financial condition, results of operations and cash flows of the
entities purported to be shown thereby at the dates and for the periods
indicated, and have been and will be prepared in accordance with generally
accepted accounting principles applied on a consistent basis throughout the
periods involved.
(p) There are no contracts or other documents that are
required to be filed as exhibits to the Registration Statement by the Act or by
the Rules and Regulations or which were required to be filed as exhibits to any
document incorporated by reference in the Registration Statement which have not
been so filed.
(q) The documents incorporated by reference in the
Registration Statement and the Prospectus have been, and each Incorporated
Document will be, prepared by the Company in conformity in all material respects
with the requirements of the Exchange Act and the rules and regulations
thereunder and such documents have been, or in the case of any Incorporated
Document will be, timely filed as required thereby. Accurate copies of each of
the documents incorporated by reference in the Registration Statement and the
Prospectus have been made available by the Company to the Representative.
(r) The Company has not taken and shall not take, directly or
indirectly, any action designed to cause or result in, or which has constituted
or which would constitute, the stabilization or manipulation of the price of
shares of Common Stock to facilitate the sale of shares issuable upon conversion
of Debentures or the Conversion Shares.
(s) No person has any rights to the registration of securities
by reason of the Company's filing the Registration Statement with the
Commission, or the offering or sale of shares of Common Stock issuable upon
conversion of the Debentures or the Conversion Shares, which have not been
effectively foreclosed in accordance with the provisions of the agreement
establishing such rights.
(t) This Agreement has been duly authorized, executed and
delivered by the Company.
3. Purchase and Delivery of and Payment for Conversion Shares. On the
basis of the representations and warranties contained in, and upon the terms and
subject to the conditions of, this Agreement, each of the Purchasers named in
Schedule I hereto, severally and not jointly, agrees:
(a) To purchase on the Redemption Date, at the Purchase Price,
the percentage set forth opposite such Purchaser's name on Schedule I of the
aggregate principal amount of Debentures tendered, in due form for transfer, to
and accepted by The First National Bank of Boston, as agent for the Purchasers,
prior to 5:00 p.m., Eastern time, on the Redemption Date, pursuant to the Notice
of Redemption (as defined herein), for sale to the Purchasers;
<PAGE> 7
-7-
(b) To convert into Common Stock, prior to 5:00 p.m.,
Eastern time, on the Redemption Date, all Debentures purchased by such
Purchaser pursuant to Paragraph 3(a) above (the "Tendered Debentures"); and
(c) To purchase from the Company the percentage of the
Conversion Shares set forth opposite such Purchaser's name on Schedule I at a
purchase price equal to the same percentage of the aggregate principal amount
of the Redemption Debentures (minus the aggregate amount of cash which would
have been delivered by the Company in connection with conversion of the
Redemption Debentures).
The respective purchase obligations of the Purchasers shall be rounded,
if necessary, to avoid fractional amounts, as the Representative may determine.
As soon as practicable following 5:00 p.m., Eastern time, on the
Redemption Date, the Company shall provide the Representative with written or
telegraphic notice of the aggregate principal amount of the Redemption
Debentures. Delivery of and payment for the Conversion Shares shall be made at
the offices of Testa, Hurwitz & Thibeault, 53 State Street, Boston,
Massachusetts 02109, as soon as reasonably practicable following receipt of such
notice by the Representative or at such other time as the Representative and the
Company may agree upon in writing. The date and time for such delivery and
payment are herein sometimes referred to as the "Delivery Date." On the Delivery
Date, the Company shall deliver to the Representative certificates for the
Conversion Shares against payment of the purchase price therefor to or upon the
written order of the Company by certified or official bank check or checks
payable in New York Clearing House (next-day) funds or in such other manner as
may be reasonably acceptable to the Company and the Representative. Time shall
be of the essence, and delivery at the time specified pursuant to this
Agreement is a further condition of the obligation of each Purchaser hereunder.
Such certificates shall be registered in such names and in such numbers of
shares of Common Stock as the Representative shall request in writing. For the
purpose of expediting the checking and packaging of the certificates for the
Conversion Shares, the Company shall make such certificates available for
inspection by the Representative in New York, New York as soon as practicable
following 5:00 p.m., Eastern time, on the Redemption Date.
It is understood that the Purchasers intend to resell the shares of
Common Stock acquired upon conversion of the Tendered Debentures and the
Conversion Shares (collectively, the "Resale Shares") at prices prevailing in
the open market. The Purchasers agree to remit to the Company (a) 100% of the
Profit (as hereinafter defined) received on the resale of the Resale Shares,
until the amount paid to the Company shall equal $280,657.00, and (b)
thereafter, 50% of the Profit received on the resale of the Resale Shares. As
used herein, "Profit" means the excess of the aggregate proceeds received on the
resale of the Resale Shares over the aggregate cost to the Purchasers of the
Resale Shares, which in the case of the shares acquired upon conversion of the
Tendered Debentures shall include the Purchase Price for the Tendered Debentures
and in the case of the Conversion Shares shall include the aggregate purchase
price paid by the Purchasers to the Company therefor in accordance with this
Paragraph 3, after deduction from such proceeds of sale of any selling
concessions, transfer taxes and other expenses of sale. For purposes of the
foregoing determination, any shares not sold by the Purchasers prior to 5:00
p.m., Eastern time,
<PAGE> 8
-8-
on the tenth day, or if the tenth day is not a business day, the next business
day thereafter, after the later of (i) the Redemption Date or (ii) such other
date as shall constitute the Delivery Date shall be deemed to have been sold on
such tenth day (or the next business day, as the case may be) for an amount
equal to the reported last sale price of the Common Stock on such day on NASDAQ
NMS. As promptly as practicable and in any event within two business days
following the completion or deemed completion (pursuant to the preceding
sentence) of the sale of such shares, the Purchasers shall furnish to the
Company a statement setting forth the aggregate proceeds received on the sale
thereof and the applicable selling concessions, transfer taxes and other
expenses of sale. Payment of any amount due to the Company under this paragraph
will be made on the business day following delivery of such statement to the
Company. Nothing contained herein shall limit the right of the Purchasers, in
their discretion, to determine the price or prices at which, or the time or
times when, any such shares shall be sold, whether or not prior to the
Redemption Date and whether or not for long or short account.
4. Compensation. As compensation for the commitment of the several
Purchasers hereunder, the Company will pay to the Representative, by certified
or official bank check or checks payable in New York Clearing House (next-day)
funds, on the date hereof, a commitment fee of $280,657.00 (the "Standby Fee").
In respect of the Purchasers' commission for the purchase and resale of the
Resale Shares, the Company will pay to the Representative, by certified or
official bank check or checks payable in New York Clearing House (next-day)
funds, on the Delivery Date or, if no Conversion Shares are to be purchased by
the Purchasers hereunder, on the Redemption Date, an additional amount (the
"Step-Up Fee") equal to $.376 per share for all Conversion Shares purchased by
the Purchasers hereunder and all shares issued upon conversion by the Purchasers
of any Debentures acquired by them on or after the date hereof, whether such
Debentures are Tendered Debentures or acquired in the open market or otherwise.
Such fees and commissions shall be for the account of the several Purchasers in
the percentages specified opposite their respective names on Schedule I hereto,
or as they may otherwise agree.
5. Further Agreements of the Company. The Company agrees:
(a) To furnish promptly to the Representative and to counsel
for the Purchasers a signed copy of the Registration Statement as originally
filed with the Commission, and each amendment thereto filed with the Commission,
including all consents and exhibits filed therewith;
(b) To deliver promptly to the Purchasers such number of
conformed copies of the Registration Statement as originally filed and each
amendment thereto and such number of the Prospectus and each amended or
supplemented Prospectus, and any documents incorporated by reference in any of
the foregoing, as the Representative may reasonably request;
(c) Subject to Paragraph 5(d) below, to file with the
Commission any amendment of the Registration Statement or any supplement to the
Prospectus as the Representative may request for the purpose of describing the
Purchasers' plan of distribution for the Common Stock acquired by them as
contemplated hereby or that may, in the judgment of the Company or the
Representative, be required by the Act or the Exchange Act or requested by the
<PAGE> 9
-9-
Commission (including the staff thereof); and to file in a timely manner with
the Commission any document required to be filed with the Commission pursuant to
Section 13, 14 or 15(d) of the Exchange Act and incorporated by reference in the
Registration Statement or the Prospectus;
(d) Prior to filing with the Commission (i) any amendment of
the Registration Statement, any amendment or supplement to the Prospectus or any
Incorporated Document or (ii) any Prospectus pursuant to Rule 424 of the Rules
and Regulations, to furnish copies thereof to the Representative and counsel for
the Purchasers and to obtain the consent (which consent shall not be
unreasonably withheld or delayed) of the Representative to such filing;
(e) To advise the Purchasers as promptly as reasonably
practicable (i) when the Registration Statement and any post-effective amendment
thereto becomes effective or any supplement or amendment to the Prospectus has
been filed, (ii) of any request by the Commission for an amendment to the
Registration Statement, a supplement to the Prospectus or any additional
information, (iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the initiation or,
to the Company's knowledge, threat of any proceeding for that purpose, (iv) of
receipt by the Company of any notification with respect to the suspension of the
qualification of the Common Stock issuable upon conversion of the Debentures or
of the Conversion Shares for sale in any jurisdiction or the initiation or, to
the Company's knowledge, threat of any proceeding for that purpose, (v) of the
happening of any event which makes untrue any statement of a material fact made
in the Registration Statement or the Prospectus, or which requires the making of
a change in the Registration Statement or the Prospectus in order to include any
material fact required to be stated therein or to make any material statement
therein not misleading and (vi) of the happening of any event described in
Paragraph 2(k);
(f) If the Company becomes aware that the Commission is
contemplating the issuance of any stop order suspending the effectiveness of the
Registration Statement, to use every reasonable effort to prevent the issuance
of such stop order, and if the Commission shall issue a stop order suspending
the effectiveness of the Registration Statement, to make every reasonable effort
to obtain the lifting of that order at the earliest possible time;
(g) As soon as reasonably practicable, but in any event no
later than the first day of the fifteenth full calendar month following the
effective date of the Registration Statement, to make generally available to its
security holders and to deliver to the Representative an earnings statement of
the Company and its subsidiaries, covering a period of twelve months beginning
after the effective date of the Registration Statement and conforming with the
requirements of Section 11(a) of the Act, which the Company will satisfy by
complying with Rule 158 under the Act and by making timely filings under the
Exchange Act; provided, however, that the Company shall not be required to file
or distribute any report that it would not otherwise file or distribute in the
ordinary course of business;
(h) For a period of not less than one year from the effective
date of the Registration Statement, to furnish to the Representative copies of
all materials furnished by the Company to its shareholders and all public
reports and all information, documents, reports and
<PAGE> 10
-10-
financial statements furnished by the Company to shareholders or the Commission
pursuant to the Exchange Act or any rule or regulation of the Commission
thereunder;
(i) To arrange, in cooperation with the Purchasers, for the
qualification of the Common Stock issuable upon conversion of the Debentures and
the Conversion Shares for offer and sale under the securities laws of such
jurisdictions as the Representative may reasonably request and to comply with
such laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the sale of such
shares, provided that in connection therewith the Company shall not be required
to qualify as a foreign corporation or file a general consent to service of
process in any jurisdiction; and in the event of the issuance of any order
suspending such qualification in any jurisdiction, to make every reasonable
effort to obtain its withdrawal at the earliest possible time;
(j) To mail or cause to be mailed on the date hereof a notice
of redemption on the Redemption Date of all outstanding Debentures, including
information with respect to the right to convert such Debentures into Common
Stock and the opportunity for holders to sell such Debentures to the Purchasers
as contemplated hereby (such notice being referred to as the "Notice of
Redemption") by first class mail, postage prepaid, to the registered holders of
such Debentures, together with a copy of the Prospectus and a letter of
transmittal, each in the form previously submitted to the Representative, the
delivery of which Notice of Redemption and the redemption of the Debentures
thereby shall conform to all the requirements of the Indenture; and to otherwise
take or cause to be taken such actions as are necessary to duly call the
Debentures for redemption on the Redemption Date in accordance with the terms of
the Indenture;
(k) To pay (i) the costs incident to the preparation, printing
and filing under the Act of the Registration Statement and any amendments and
exhibits thereto, the Prospectus and any amendments or supplements to the
Prospectus and the several documents required to be furnished to the Purchasers
pursuant to this Agreement; (ii) the costs incident to the preparation,
printing, and distribution of the Notice of Redemption (including any
advertisements thereof) and such other documents as may be distributed in
connection with the transactions contemplated by this Agreement to the
Purchasers and/or the holders of the Debentures; (iii) the fees and expenses
(including fees and disbursements of counsel to the Purchasers in connection
therewith) of qualifying the Common Stock issuable upon conversion of the
Debentures and the Conversion Shares under the securities laws of the several
jurisdictions and of preparing, printing and distributing "Blue Sky" memoranda;
(iv) the fees and expenses of listing the Common Stock issuable on conversion of
the Debentures and the Conversion Shares on the NASDAQ NMS; (v) all costs
incident to the authorization, issuance, sale and delivery of the Conversion
Shares and all transfer taxes which may be required to be paid by the Purchasers
in connection with any purchase of Debentures, conversion of the Debentures and
consummation of the transactions contemplated by this Agreement, other than
transfer taxes payable on the resale of Common Stock by the Purchasers; (vi) all
out-of-pocket costs and expenses (including reasonable fees and disbursements of
counsel) of the Purchasers in connection with this Agreement and the
transactions contemplated hereby; (vii) all costs and expenses of the Trustee;
(viii) any fees of the National Association of Securities Dealers, Inc.; and
(ix) all other costs and expenses (including
<PAGE> 11
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fees and disbursements of counsel) incident to the performance of the
obligations of the Company under this Agreement;
(l) To request that the Trustee advise the Representative
daily of the number of the Debentures surrendered for conversion into Common
Stock or for redemption or tendered to the Trustee for sale to the Purchasers on
the preceding day;
(m) To take no action the effect of which would be to require
an adjustment in the conversion price of the Debentures from the present price
set forth above, and not to amend any of the terms of the Indenture or any
Debentures except with the Representative's prior written consent;
(n) Following notice from the Representative that the offering
and sale of the Common Stock by the Purchasers contemplated by this Agreement
shall have been completed, the Company will, subject to Paragraph 5(d) hereof,
promptly file a post-effective amendment to the Registration Statement and/or to
take such other steps as may be necessary to remove from registration all shares
of Common Stock registered thereunder which have not been issued to the
Purchasers upon conversion of Debentures or have not been purchased by the
Purchasers pursuant to this Agreement; and the Company shall not take any such
actions with respect to removing any shares from registration, including
withdrawing or applying for withdrawal of the Registration Statement, prior to
receipt of such notice from the Representative unless the Representative shall
have otherwise consented to such action;
(o) From the date hereof until 90 days following the
Redemption Date, except with the Representative's prior written consent and
except for (i) the issuance of the Conversion Shares, (ii) the issuance of
Common Stock upon conversion of the Debentures, (iii) the issuance of Common
Stock or options therefor pursuant to any existing stock option or stock
purchase plans of the Company, (iv) the issuance of Common Stock upon the
conversion of the Company's 7-1/4% Convertible Subordinated Debentures due 2011,
(v) the issuance of shares of Common Stock upon the exercise of rights granted
pursuant to the Rights Agreement and (vi) the issuance of Common Stock pursuant
to the exercise of the Warrants, the Company will not offer for sale, sell or
otherwise dispose of (or enter into any transaction which is designed to, or
could be expected to, result in the disposition by any person of), directly or
indirectly, or file a registration statement under the Act covering, any shares
of its Common Stock or securities convertible into or exchangeable for Common
Stock, or offer for sale, sell or grant options, rights or warrants with respect
to any shares of its Common Stock or securities convertible into or exchangeable
for Common Stock;
(p) To permit the conversion into Common Stock of all Tendered
Debentures, and all other Debentures otherwise surrendered by the Purchasers to
the Trustee for conversion, as though such Debentures were duly surrendered for
conversion prior to 5:00 p.m., Eastern time, on the Redemption Date,
notwithstanding any procedural requirements with respect to conversion set forth
in the Indenture; and to use its best efforts to ensure that certificates
representing shares of Common Stock issuable to the Purchasers upon conversion
of Debentures are delivered to the
<PAGE> 12
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Purchasers as soon as practicable and in the case of Tendered Debentures that
such certificates are delivered to the Purchasers as soon as practicable
following 5:00 p.m., Eastern time, on the Redemption Date;
(q) That the Company will not make any determination with
respect to questions regarding the validity, form or eligibility of Debentures
tendered to the Trustee for sale to the Purchasers or the proper completion and
execution of a letter of transmittal or other documents required in connection
with such sale without the prior consent of the Representative; and the Company
will not waive any irregularities or conditions with respect to proper tender of
Debentures for purchase by the Purchasers without the prior consent of the
Representative;
(r) That the Company will provide the Purchasers, or instruct
the Trustee to provide the Purchasers, with copies of such documentation,
including letters of transmittal, delivered to the Trustee in connection with
the tender of Debentures for sale to the Purchasers as the Representative may
reasonably request; and
(s) to pay accrued interest to the Redemption Date to the
holders of all Tendered Debentures as well as to holders who redeem Debentures
to the Company; and for such purposes, to deposit with the Trustee, at or
before the time of which the Purchasers are to deposit the Purchase Price for
Tendered Debentures, into the same account to which the Purchasers may deposit
the Purchase Price for Tendered Debentures, the aggregate amount of accrued
interest to the Redemption Date on all Debentures which have not been
surrendered for conversion prior to the time such payment is made.
6. Indemnities and Contribution. (a) The Company shall indemnify and
hold harmless each Purchaser, its officers and employees and each person, if
any, who controls such Purchaser within the meaning of the Act from and against
any loss, claim, damage or liability, joint or several, and any action in
respect thereof (including, but not limited to, any loss, claim, damage,
liability or action relating to purchases and sales of Common Stock), to which
such Purchaser, officer, employee or controlling person may become subject,
under the Act or otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement, the
Prospectus, any Incorporated Document, the Registration Statement or Prospectus
as amended or supplemented or any blue sky application or other document
prepared or executed by the Company (or based upon any written information
furnished by the Company) specifically for the purpose of qualifying any or all
of the Common Stock issuable upon conversion of the Debentures and the
Conversion Shares under the securities laws of any state or other jurisdiction
(any such application, document or information being hereinafter called a "Blue
Sky Application"), (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading or (iii) any act or failure to act or any alleged act or
failure to act by any Purchaser in connection with, or relating in any manner
to, the Common Stock or the transactions contemplated hereby, and which is
included as part of or referred to in any loss, claim, damage, liability or
action arising out of or based upon matters covered by clause (i) or (ii) above
(provided that the Company shall not be liable under this clause (iii) to the
extent that it is determined in a final judgment by a court of competent
jurisdiction that such loss, claim, damage, liability or action resulted
directly from any such acts or failures to act undertaken or omitted to be taken
by such Purchaser through its gross negligence or willful misconduct), and
promptly shall reimburse such Purchaser, officer, employee, and each such
controlling person for any legal and other expenses reasonably incurred by such
Purchaser, officer, employee or controlling person in investigating or defending
or preparing to defend against any such loss, claim, damage, liability or action
as such expenses are incurred; provided, however, that the Company shall not be
liable in any such case to the extent that any such loss, claim, damage,
liability or action arises out of, or is based upon, any untrue statement or
alleged untrue statement or omission or alleged omission made in the
Registration Statement or the
<PAGE> 13
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Prospectus or any amendment or supplement thereto or in any Blue Sky Application
in reliance upon and in conformity with written information concerning a
Purchaser furnished to the Company by or on behalf of a Purchaser specifically
for inclusion therein. The foregoing indemnity agreement is in addition to any
liability that the Company may otherwise have to the Purchasers or to any
officer, employee or controlling person of a Purchaser.
(b) Each Purchaser, severally but not jointly, shall indemnify
and hold harmless the Company, each of its directors, each of its officers who
signed the Registration Statement and any person who controls the Company within
the meaning of the Act from and against any loss, claim, damage or liability,
joint or several, and any action in respect thereof, to which the Company or any
such director, officer or controlling person may become subject, under the Act
or otherwise, insofar as such loss, claim, damage, liability or action arises
out of, or is based upon, any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, the Prospectus or the
Registration Statement or Prospectus as amended or supplemented, or arises out
of, or is based upon, the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with written information concerning such
Purchaser furnished to the Company by or on behalf of such Purchaser
specifically for inclusion therein, and promptly shall reimburse the Company and
any such director, officer or controlling person for any legal and other
expenses reasonably incurred by the Company or by any such director, officer or
controlling person in investigating or defending or preparing to defend against
any such loss, claim, damage, liability or action as such expenses are incurred.
The foregoing indemnity agreement is in addition to any liability that such
Purchaser may otherwise have to the Company or any of its directors, officers or
controlling persons.
(c) Promptly after receipt by an indemnified party under this
Paragraph 6 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Paragraph 6, notify the indemnifying party in
writing of the claim or the commencement of that action, provided that the
failure to notify the indemnifying party shall not relieve it from any liability
that it may have under this Paragraph 6 except to the extent it has been
materially prejudiced by such failure, and provided further that the failure to
notify the indemnifying party shall not relieve it from any liability that it
may have to an indemnified party otherwise than under this Paragraph 6. If any
such claim or action shall be brought against any indemnified party, and it
shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein, and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. After notice from
the indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Paragraph 6 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation. Notwithstanding the
foregoing, such indemnified party shall have the right to employ its own counsel
in any such action, but the fees and expenses of such counsel shall be at the
expense of such indemnified party
<PAGE> 14
-14-
unless (i) the employment of such counsel has been authorized in writing by the
indemnifying party in connection with the defense of such action, (ii) such
indemnified party shall have been advised in writing by counsel that there may
be legal defenses available to it which are different from or additional to
those available to the indemnifying party (in which case the indemnifying party
shall not have the right to assume the defense of such action on behalf of such
indemnified party) or (iii) the indemnifying party shall not have assumed the
defense of such action and employed counsel therefor reasonably satisfactory to
such indemnified party within a reasonable time after notice of commencement of
such action, in any of which events such fees and expenses shall be borne by the
indemnifying party. The indemnifying party or parties shall not, however, in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the reasonable fees and expenses of more than one separate law
firm at any one time for all such indemnified party or parties. No indemnifying
party shall (i) without the prior written consent of the indemnified parties
(which consent 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,
or (ii) be liable for any settlement of any proceeding effected without its
written consent (which consent shall not be unreasonably withheld), but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Paragraph 6
shall for any reason be unavailable to or insufficient to hold harmless an
indemnified party under Paragraph 6(a) or 6(b) in respect of any loss, claim,
damage or liability, or any action in respect thereof, referred to therein, then
each indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Company on the one hand and the Purchasers on the other from the
transactions contemplated by this Agreement or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and the
Purchasers on the other with respect to the statements or omissions which
resulted in such loss, claim, damage or liability, or action in respect thereof,
as well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Purchasers on the other shall be
deemed to be in the same proportion as the aggregate principal amount of all of
the outstanding Debentures, as set forth in Paragraph 2(h), bears to the Standby
Fee and the Step-Up Fee. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by the Company or the Purchasers, the intent of the parties
and their relative knowledge, access to information and opportunity to correct
or prevent such statement or omission. The Company and the Purchasers agree that
it would not be just and equitable if contributions pursuant to this Paragraph
6(d) were to be determined by pro rata allocation (even if the
<PAGE> 15
-15-
Purchasers were treated as one entity for such purpose) or by any other method
of allocation which does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as a
result of the loss, claim, damage or liability, or action in respect thereof,
referred to above in this Paragraph 6(d) shall be deemed to include, for
purposes of this Paragraph 6(d), any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Paragraph 6(d), no
Purchaser shall be required to contribute any amount in excess of the amount by
which the portion of the Standby Fee and the Step-Up Fee received by such
Purchaser (after deducting therefrom losses, if any, incurred in reselling the
Resale Shares) exceeds the amount of any damages which such Purchaser has
otherwise paid or become liable to pay by reason of any untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Purchasers' obligations to contribute as provided in this
Paragraph 6(d) are several in proportion to their respective percentages set
forth in Schedule I and not joint.
(e) The Purchasers confirm and the Company hereby agrees that
the only information concerning such Purchasers furnished to the Company by or
on behalf of the Purchasers specifically for use in the Registration Statement,
the Prospectus or any Blue Sky Application is the information concerning such
Purchasers set forth in the third and sixth paragraphs on the cover page of, and
under the caption "Standby and Other Arrangements" in, the Prospectus.
(f) The indemnity and contribution agreements contained in
this Paragraph 6 and the representations, warranties and agreements of the
Company in Paragraphs 2 and 5 hereof shall survive the completion of the
transactions contemplated hereby and shall remain in full force and effect,
regardless of any termination or cancellation of this Agreement or any
investigation made by or on behalf of any indemnified party.
7. Conditions of Purchasers' Obligations. The respective obligations of
the Purchasers hereunder (including, without limitation, the obligation to
purchase Debentures tendered by the holders thereof for sale to the Purchasers
and the obligation to purchase the Conversion Shares) are subject to the
accuracy of the representations and warranties of the Company contained herein
on and as of the date hereof, the effective date of the Registration Statement,
the Redemption Date and the Delivery Date, to the performance by the Company of
its obligations hereunder, and to each of the following additional terms and
conditions:
(a) The Registration Statement shall have become effective not
later than 6:00 p.m., Eastern time, on the date hereof, or at such later date
and time as shall be consented to in writing by the Representative; on the date
hereof the Debentures shall have been duly called for redemption on the
Redemption Date by all requisite action; at or before the Delivery Date, no stop
order suspending such effectiveness, nor any order directed to any document
incorporated, or deemed to be incorporated, by reference in the Registration
Statement and the Prospectus, shall have been issued, and prior to that time no
stop order proceeding shall have been initiated or
<PAGE> 16
-16-
threatened by the Commission and no challenge by the Commission by appropriate
proceedings shall have been made to the accuracy or adequacy of any document
incorporated, or deemed to be incorporated, by reference in the Registration
Statement and the Prospectus; any request of the Commission for inclusion of
additional information in the Registration Statement or the Prospectus or
otherwise shall have been complied with; and the Company shall not have filed
with the Commission any prospectus pursuant to Rule 424 of the Rules and
Regulations or any amendment or supplement to the Registration Statement or the
Prospectus or any Incorporated Document without the consent of the
Representative.
(b) The legality and sufficiency of the redemption of the
Debentures, the conversion of the Debentures into Common Stock as described
herein, the purchase by and sale to the Purchasers of the Tendered Debentures,
the issue and sale to the Purchasers of the Conversion Shares, the validity and
form of the certificates representing the shares of Common Stock deliverable to
the Purchasers as contemplated hereby, all corporate proceedings and other legal
matters incident to the foregoing and to the authorization, form and validity of
this Agreement and the form of the Registration Statement, the Prospectus and
any Incorporated Document, and all other legal matters relating to this
Agreement and the transactions contemplated hereby shall be satisfactory in all
material respects to Testa, Hurwitz & Thibeault, counsel for the Purchasers, and
the Company shall have furnished to such counsel all documents and information
that such counsel shall reasonably request to enable them to pass upon such
matters.
(c) No Purchaser shall have discovered and disclosed to the
Company that the Registration Statement or the Prospectus or any amendment
thereof or supplement thereto contains an untrue statement of a fact which, in
the opinion of the Representative or of Testa, Hurwitz & Thibeault, counsel for
the Purchasers, may be material or omits to state a fact which, in the opinion
of the Representative or such counsel, may be material and is required to be
stated therein or is necessary to make the statements therein not misleading.
(d) Since the respective dates as of which information is
given in the Prospectus (as in effect at the time the Registration Statement is
initially declared effective by the Commission), there shall not have been any
material change in the capital stock of the Company (other than as contemplated
by the Prospectus, as in effect at the time the Registration Statement is
initially declared effective by the Commission) or any of its subsidiaries or
any material adverse change in the indebtedness for money borrowed of the
Company or any of its subsidiaries or any material adverse change in, or any
development that is likely to cause or result in a material adverse change in,
the business, condition (financial or other), prospects or results of operations
of the Company and its subsidiaries taken as a whole, except in all cases for
changes or developments disclosed in the Prospectus (as in effect at the time
the Registration Statement is initially declared effective by the Commission).
(e) Pamela Keating, Esq., General Counsel of the Company,
shall have furnished to the Representative her opinion addressed to the
Purchasers and dated the date of the effectiveness of the Registration
Statement, to the effect that:
<PAGE> 17
-17-
(i) The Company has been duly incorporated and
is validly existing and in good standing under the laws of its jurisdiction of
incorporation, is duly qualified to do business as a foreign corporation in all
jurisdictions in which its ownership or lease of properties or the conduct of
its business requires such qualification (except where the failure to so qualify
or be in good standing would not have a material adverse effect upon the Company
and its subsidiaries taken as a whole), and has all corporate power and
authority necessary to own its properties and to conduct the businesses in which
it is engaged as described in the Prospectus;
(ii) The Registration Statement is effective
under the Act; to the knowledge of such counsel, no stop order suspending its
effectiveness has been issued and no proceeding for that purpose is pending or
has been threatened by the Commission;
(iii) The Registration Statement, the Prospectus,
and each amendment or supplement thereto (except for the financial statements,
financial schedules, and other financial and statistical data included or
incorporated therein, as to which such counsel need express no opinion) comply
as to form in all material respects with the Act and the Rules and Regulations;
and the documents incorporated or deemed incorporated by reference therein (with
the foregoing exceptions), when they were filed with the Commission, complied as
to form in all material respects with the requirements of the Exchange Act and
the rules and regulations of the Commission thereunder;
(iv) Although such counsel has not independently
verified and is not passing upon, and does not assume any responsibility for,
the accuracy, completeness or fairness of the information contained in the
Registration Statement and Prospectus (except to the extent otherwise
specifically addressed in such opinion), based upon such counsel's having served
as general counsel to the Company, such counsel's participation in the
preparation of the Registration Statement and Prospectus and such counsel's
discussions with officers, directors and employees of the Company and the
Purchasers concerning the information contained in the Registration Statement
and Prospectus and the proposed responses to various items in Form S-3, no facts
have come to such counsel's attention that lead such counsel to believe that the
Registration Statement (except for the financial statements, financial schedules
and other financial data included or incorporated therein, as to which such
counsel need express no opinion), as of its effective date and as of the date of
such opinion, contained or contains any untrue statement of a material fact or
omitted or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading, or that the
Prospectus (with the foregoing exceptions), at the effective date and as amended
and supplemented to the date of such opinion, contained or contains any untrue
statement of a material fact or omitted or omits to state a material fact
required to be stated therein or necessary in order to make the statements
therein not misleading;
(v) Such counsel does not know of any litigation
or any governmental proceeding pending or threatened against the Company or any
of its subsidiaries relating to this Agreement and the transactions contemplated
hereby or which is required to be disclosed in the Prospectus which is not
disclosed as so required;
<PAGE> 18
-18-
(vi) Such counsel does not know of any contracts
or other documents which are required to be filed as exhibits to the
Registration Statement by the Act or by the Rules and Regulations, or which are
required to be filed by the Exchange Act or the rules and regulations of the
Commission thereunder as exhibits to any document incorporated or deemed
incorporated by reference in the Prospectus, which have not been filed as
exhibits to the Registration Statement or to such document or incorporated
therein by reference as permitted by the Rules and Regulations or the rules and
regulations of the Commission under the Exchange Act;
(vii) The Debentures are convertible as set forth
in Paragraph 2(g) hereof; the issued and outstanding shares of capital stock of
the Company, the shares of Common Stock issuable upon conversion of the
Debentures (which have been duly reserved for issuance upon such conversion) and
the Conversion Shares, have been duly authorized; and all of the issued and
outstanding shares of capital stock of the Company are, and all of the shares of
Common Stock issuable upon conversion of the Debentures, will be, when issued,
validly issued and outstanding, fully paid and non-assessable, and free of
preemptive rights, with no personal liability attaching to the ownership
thereof; and the Conversion Shares, upon issuance, delivery and payment therefor
in the manner described herein, will be duly authorized, validly issued and
outstanding, fully paid and non-assessable, and free of preemptive rights, with
no personal liability attaching to the ownership thereof;
(viii) There are no preemptive or other rights to
subscribe for or to purchase, and no restrictions upon the voting or transfer
of, any shares of Common Stock issuable upon conversion of the Debentures or the
Conversion Shares pursuant to the Articles or By-Laws or any agreement (other
than this Agreement or the Indenture) or other instrument known to such counsel
to which the Company is a party or by which the Company may be bound; and
neither the filing of the Registration Statement nor the offering or sale of any
shares of Common Stock issuable upon conversion of the Debentures or the
Conversion Shares gives rise to any rights for or relating to the registration
of any shares of capital stock of the Company or any subsidiary of the Company;
(ix) The Common Stock conforms in all material
respects as to legal matters to the statements concerning the Common Stock of
the Company contained or incorporated by reference in the Prospectus, and the
authorized shares of capital stock of the Company are as set forth in the
Prospectus;
(x) This Agreement has been duly authorized,
executed and delivered by the Company; none of the execution, delivery and
performance of this Agreement by the Company or the consummation by the Company
of the transactions contemplated hereby, including conversion of the Debentures,
the call for redemption of the Debentures and the redemption of the Debentures,
will conflict with, or result in the creation or imposition of any lien, charge
or encumbrance upon any of the assets of the Company or any of its subsidiaries
pursuant to the terms of, or constitute a breach or default under, any
agreement, indenture or instrument known to such counsel, or result in a
violation of (A) the provisions of the Articles or the By-Laws of the Company or
the charter or other constituent documents or by-laws of any of its
<PAGE> 19
-19-
subsidiaries, in each case as amended, or (B) any Massachusetts statute or any
order, rule or regulation known to such counsel of any court or governmental
agency having jurisdiction over the Company, any of its subsidiaries or their
respective properties; and no consent, authorization or order of, or filing or
registration with, any court or governmental agency is required for the
execution, delivery and performance by the Company of this Agreement and
consummation by the Company of the transactions contemplated hereby, including
conversion of the Debentures, the call for redemption of the Debentures and the
redemption of the Debentures, except such as may be required by the Act, the
Exchange Act or state securities laws; and
(xi) The call for redemption of the Debentures
and the redemption of the Debentures on the Redemption Date have been duly
authorized and, subject only to the mailing of the Notice of Redemption in
accordance with the requirements of the Indenture (if such Notice has not been
mailed as of the date of such opinion), all the outstanding Debentures have been
duly called for redemption on the Redemption Date; and the right to convert
Debentures into Common Stock will expire at 5:00 p.m., Eastern time, on the
Redemption Date.
(f) On the Delivery Date, Pamela Keating, Esq., General
Counsel of the Company, shall have furnished to the Representative such
counsel's opinion addressed to the Purchasers and dated the Delivery Date, to
the effect that the shares of Common Stock issued to the Purchasers upon
conversion of the Tendered Debentures and the Conversion Shares delivered to the
Purchasers have been duly authorized and issued and are fully paid,
non-assessable and free of preemptive rights, with no personal liability
attaching to the ownership thereof; any required filing of the Prospectus
pursuant to Rule 424(b) has been made within the time period required by Rule
424(b) and otherwise confirming as of such date such counsel's opinion furnished
pursuant to subparagraph (e) above.
(g) On the effective date of the Registration Statement
and on the Delivery Date, the Company shall have furnished to the Representative
a certificate, addressed to the Purchasers and dated the date of delivery
thereof, of its Chairman of the Board, President or any Vice President and its
chief financial officer or controller stating that:
(i) the representations and warranties of the
Company in Paragraph 2 are true and correct as of the date of delivery thereof;
the Company has complied with all its agreements contained herein and the
conditions set forth herein to be fulfilled on its part or on its behalf at or
prior to the date of delivery thereof have been fulfilled;
(ii) they have examined the Registration
Statement and the Prospectus and that, in their opinion, (A) the statements made
in the Registration Statement and the Prospectus are true and correct in all
material respects, and neither the Registration Statement nor the Prospectus
omits to state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading and (B) no event has
occurred which should have been set forth in an amendment of or supplement to
the Prospectus which has not been so set forth in such amendment or supplement;
and
<PAGE> 20
-20-
(iii) the Registration Statement has become
effective under the Act and no stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceedings for such purpose have
been taken or are, to their knowledge, contemplated by the Commission.
(h) On the effective date of the Registration Statement
and on the Delivery Date, the Representative shall have received from Arthur
Andersen LLP a so-called "comfort letter", dated as of each such date, in form
and substance satisfactory to the Representative.
(i) The Company shall have furnished to the
Representative such further certificates and documents confirming the
representations and warranties contained herein and addressing such matters
relating to the transactions contemplated hereby as the Representative may have
reasonably requested.
(j) The Purchasers shall have entered into arrangements
with the Trustee relating to the tender of Debentures to the Trustee for sale to
the Purchasers, payment by the Purchasers therefor, conversion of Tendered
Debentures into Common Stock and related matters, such arrangements to be
reasonably satisfactory to the Purchasers.
(k) Debentures tendered for purchase by the Purchasers
shall be in such form and accompanied by such documents as may be required to
assure that the Purchasers shall, upon payment of the Purchase Price, acquire
clear and unencumbered title thereto.
All opinions, letters and other documents deliverable hereunder shall
be deemed to be in compliance with the provisions hereof only if they are in
form and substance reasonably satisfactory to Testa, Hurwitz & Thibeault,
counsel for the Purchasers.
8. Open Market Transactions. Until 5:00 p.m., Eastern time, on
the Redemption Date, the Purchasers may (but shall be under no obligation to)
purchase Debentures in the open market in such amounts and at such prices as the
Purchasers may deem advisable. All Debentures so purchased will be converted
into Common Stock. Common Stock so acquired by the Purchasers may be sold at
any time or from time to time by the Purchasers pursuant to the Registration
Statement. It is understood that for the purpose of stabilizing the price of
the Common Stock or otherwise, the Purchasers may from time to time make
purchases and sales of Common Stock, in the open market or otherwise, at such
time, in such amounts and on such terms as the Purchasers may deem advisable,
and overallot in arranging sales.
9. Surrender of Debentures. Each Purchaser agrees that any
Debentures beneficially owned by it on the Redemption Date (in addition to any
Debentures purchased as contemplated by Paragraph 8 hereof and the Tendered
Debentures) will be surrendered for conversion into Common Stock.
10. Soliciting Conversions. The Purchasers may assist the Company
in soliciting conversions of Debentures into Common Stock by the holders thereof
but shall not be entitled to compensation by the Company for any such
assistance.
<PAGE> 21
-21-
11. Notices. The Company shall be entitled to act and rely upon
any request, consent, notice or agreement given or made by the Representative.
Any notice to the Purchasers shall be sufficient if given in writing or by
facsimile or telex addressed to them c/o Lehman Brothers Inc., Three World
Financial Center, New York, New York 10285, Attention: Syndicate Department
(Fax: 212-526-6588), with a copy, in the case of any notice pursuant to
Paragraph 6(c), to the Director of Litigation, Office of the General Counsel,
Lehman Brothers Inc., Three World Financial Center, 10th Floor, New York, New
York 10285; and any notice to the Company shall be sufficient if given in
writing or by facsimile or telex addressed to the Company at LTX Corporation,
LTX Park at University Avenue, Westwood, Massachusetts 02090, Attention: General
Counsel (Fax: 617-329-8836).
12. Effective Date and Termination. This Agreement shall become
effective upon the mailing, on the date hereof, of the Notice of Redemption to
the holders of Debentures. Until such time, this Agreement may be terminated by
the Company by notice to the Representative or by the Representative by notice
to the Company. The obligations of the Purchasers hereunder may also be
terminated by the Representative by notice given to the Company prior to
delivery of and payment for the Conversion Shares, if subsequent to the
execution and delivery of this Agreement:
(i) a suspension in trading in securities generally on the New
York Stock Exchange or the American Stock Exchange or the over-the-counter
market, or the establishment of minimum prices on either of such exchanges or
such market, shall occur, or
(ii) a banking moratorium shall have been declared by federal or
New York State authorities, or
(iii) the United States shall have become engaged in hostilities,
there shall have been an escalation of hostilities involving the United States
or there shall have been a declaration of a national emergency or war by the
United States.
If notice shall have been given by the Company pursuant to the second
sentence of this Paragraph 12 preventing this Agreement from becoming effective,
or if the Company shall fail to tender the Conversion Shares for delivery to the
Purchasers for any reason permitted under this Agreement or if the Purchasers
shall decline to purchase Debentures tendered by holders thereof for purchase by
the Purchasers or the Conversion Shares for any reason permitted under this
Agreement, the Company shall not be liable to the Purchasers under any
circumstances for damages on account of the loss of anticipated profits from the
sale of Resale Shares, but shall nonetheless be liable to the Purchasers for the
Standby Fee set forth in Paragraph 4 hereof, the Step-up Fee with respect to
shares of Common Stock issued upon conversion of any Debentures acquired by the
Purchasers on or after the date hereof and the costs and expenses set forth in
Paragraph 5(k) hereof. If this Agreement is terminated as a result of the
occurrence of the events described in clauses (i), (ii) or (iii) above, the
Company shall not be liable to the Purchasers for (and the Purchasers shall
refund) the Standby Fee set forth in Paragraph 4 hereof, but the Company shall
remain liable for the costs and expenses set forth in Paragraph 5(k) hereof.
<PAGE> 22
-22-
13. Election to Not Sell Conversion Shares. Notwithstanding
anything herein to the contrary, if the aggregate principal amount of Redemption
Debentures is less than $100,000 (or such greater amount as shall be consented
to in writing by the Representative), then the Company may, in its sole
discretion and upon notice to the Representative as soon as practicable
following 5:00 p.m., Eastern time, on the Redemption Date, elect not to issue,
sell or deliver any Conversion Shares to the Purchasers on the Delivery Date.
In such event, the provisions of this Agreement shall remain in full force and
effect, except that the documents specified in Paragraphs 7(f), 7(g) and 7(h)
need not be delivered to the Representative on the Delivery Date.
14. Persons Entitled to Benefit of Agreement. This Agreement
shall inure to the benefit of and be binding upon the Purchasers, the Company
and their respective successors. This Agreement and the terms and provisions
hereof are for the sole benefit of only those persons, except that (a) the
representations, warranties, indemnities and agreements of the Company contained
in this Agreement shall also be deemed to be for the benefit of the officers and
employees of a Purchaser and the person or persons, if any, who control a
Purchaser within the meaning of the Act, and (b) the indemnity and contribution
agreement of the Purchasers contained in Paragraph 6 hereof shall be deemed to
be for the benefit of directors of the Company, officers of the Company who have
signed the Registration Statement and any person who controls the Company within
the meaning of the Act. Nothing in this Agreement is intended or shall be
construed to give any person other than the persons mentioned in the preceding
two sentences any legal or equitable right, remedy or claim under or in respect
of this Agreement or any provision contained herein.
15. Certain Definitions. For purposes of this Agreement: (a)
"business day" means any day on which the New York Stock Exchange is open for
trading; and (b) "subsidiary" has the meaning set forth in Rule 405 of the Rules
and Regulations.
16. Governing Law; Counterparts. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York. This
Agreement may be executed in one or more counterparts and, if executed in more
than one counterpart, the executed counterparts shall together constitute a
single instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 23
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If the foregoing correctly sets forth the agreement between the Company
and the Purchasers, please indicate your acceptance in the space provided for
that purpose below.
Very truly yours,
LTX CORPORATION
By:_________________________________
Name:_______________________________
Title:______________________________
Accepted:
LEHMAN BROTHERS INC.
NEEDHAM & COMPANY, INC.
By: LEHMAN BROTHERS INC.
By:
------------------------------
Name:
----------------------------
Title: Authorized Representative
---------------------------
<PAGE> 24
SCHEDULE I
<TABLE>
<CAPTION>
Percentage of the Aggregate
Principal Amount of Tendered
Debentures and Conversion
Purchaser Shares to be Purchased
--------- ----------------------------
<S> <C>
Lehman Brothers Inc. 66.67%
Needham & Company, Inc. 33.33%
-------
TOTAL 100.00%
=======
</TABLE>
<PAGE> 1
EXHIBIT 5
June 29, 1995
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Registration Statement on Form S-3 Relating to 2,241,891 Shares
of Common Stock, Par Value $0.05 Per Share, of LTX Corporation
Dear Sirs:
I am General Counsel of LTX Corporation (the "Company") and have acted
as counsel in connection with the registration under the Securities Act of
1933, as amended (the "Act"), on Form S-3 of 2,241,891 shares of the Company's
Common Stock, par value $0.05 per share (the "Shares"), which may from time to
time be issued upon conversion of the Company's 13 1/2% Convertible
Subordinated Debentures due 2011 (the "Debentures") or under a standby
agreement with certain standby purchasers and the resale of such shares by such
purchasers.
I have reviewed the corporate proceedings taken by the Company with
respect to the authorization of the issuance of the Shares. I have also
examined and relied upon originals or copies, certified or otherwise
authenticated to my satisfaction, of all corporate records, documents,
agreements or other instruments of the Company and have made all investigations
of law and have discussed with the Company's representatives all questions of
fact that I have deemed necessary or appropriate.
Based upon and subject to the foregoing, I am of the opinion that the
Shares have been duly authorized by the Company and when issued as contemplated
by the Registration Statement will be validly issued, fully paid and
non-assessable.
Pursuant to the requirements of the Act, I hereby consent to the filing
of this opinion as Exhibit 5 to the Registration Statement, including any
amendments thereto, and to the use of my name under the caption "Validity of
Common Stock" in the prospectus constituting a part thereof.
Very truly yours,
/s/ PAMELA A. KEATING
-----------------------------
Pamela A. Keating
General Counsel
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated September 13, 1994
(except with respect to the matter discussed in Note 4, as to which the date is
October 6, 1994) included in LTX Corporation's Form 10-K for the year ended
July 31, 1994 and to all references to our Firm included in this registration
statement.
/s/ ARTHUR ANDERSEN, LLP
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Boston, Massachusetts
June 29, 1995
